Getting braces or other orthodontic work usually isn't an enjoyable experience for you or your bank account. However, when the work is finished and paid for, you -- or a member of your family -- might end up with an extra tax deduction in addition to a straighter smile.
TL;DR (Too Long; Didn't Read)
As long as your total medical expenses, including any orthodontic work, meet the 10 percent threshold, you can deduct them on your taxes.
Orthodontic work qualifies as a dental expense, so you can include the costs when you figure your medical-expenses deduction on your annual income taxes. Deduct the costs in the year that you pay for the costs, even if you receive the dental treatment in a different year.
If your dentist puts on your braces in December, but you don't pay the bill until January, you may deduct the costs in that following year. However, you can't include any amounts that your insurance either paid for or reimbursed you. In short, it must be an out-of-pocket expense to be deductible.
Orthodontics for Others
You aren't limited to only the cost of orthodontics for yourself. When figuring your deduction, you can also include the cost of orthodontics for your spouse and those you claim as dependents either when you paid for the costs or when the treatment was provided. If your kid needs braces and insurance only covers half of the $3,000 cost, you can count the $1,500 you pay out-of-pocket toward your deduction.
Minimum Expenses Needed
The medical and dental expenses deduction, which includes your deductible orthodontics costs, only allows a deduction for costs in excess of a specified percentage of your adjusted gross income. However, you get to combine all of your deductible expenses to meet the threshold. In 2018, the cutoff is 7.5 percent, but in 2019 it increases to 10 percent.
For example, if your adjusted income is $62,000 and you have $4,000 of orthodontic bills and $5,000 of other deductible medical costs, your total medical costs -- $9,000 -- exceed 10 percent of your AGI ($6,200). So, you can deduct $2,800 ($9,000 minus $6,200). This percentage can change from one year to the next, so research the current limits before heading to your orthodontic appointment.
To write off your orthodontic expenses, you must itemize your deductions. The downside to itemizing is that you can't also claim the standard deduction. Currently, the standard deduction is $12,000 for single taxpayers, $18,000 for heads of household and $24,000 for married taxpayers filing jointly.
As a result, unless your medical and dental expenses deduction plus your other itemized deductions exceed the standard deduction, your orthodontic expenses won't help you on your taxes.
Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."