Relationships, finances and anxieties are three reasons to seek therapy -- and so is a fractured arm or a stiff neck. As with any medical expense, it pays to save up your receipts for any kind of therapy you're undergoing. Any related expenses not covered or reimbursed by insurance can help to whittle away your tax liability come April 15.
You can deduct your trips to the therapist as medical treatment, according to the Internal Revenue Service. This includes mental health counseling, art therapy, pain management, psychiatry, massage therapy, acupuncture, developmental therapy, physical therapy and rehab for substance abusers, as well as any other care to diagnose, alleviate or prevent a physical or mental defect or illness. The IRS requires that a licensed psychiatrist, certified practitioner or therapist perform the services. Absent medical necessity, however, therapy is not tax-deductible.
To take the deduction, your medical expenses must exceed 7.5 percent of your adjusted gross income. For example, 7.5 percent of an AGI of $30,000 is $2,250. If your medical expenses total $2,700, you can deduct the $450 of your medical expenses that exceed 7.5 percent of your AGI. You may also include qualifying dependents, spouses or decedents for whom you pay expenses. Deduct from your expenses any portion of the bills that are reimbursed by insurance or your employer.
Mileage, tolls and parking can add up quickly if you make many trips to the therapist or other medical doctor. Include your mileage, tolls and parking as an expense to help you meet the income threshold. As of 2012, the deductible mileage rate was 23 cents per mile driven for medical purposes. You can also deduct health insurance premiums you paid and expenses for special equipment that may help in your recovery. Prescription medications, including psychiatric drugs, if necessary, as well as long-term care expenses and home health care, are also deductible.
To claim your therapeutic expenses, you must file Form 1040, Schedule A and itemize your deductions. Tally up your bills, and enter the amount on line 1. Enter your AGI on line 2, which can be found on line 35 of Form 1040. Multiply the AGI by 7.5 percent to calculate your deductibility threshold. Subtract the total from line 3 from your total medical costs and enter that amount on line 4. Attach Schedule A to Form 1040 when you file -- if you're filing electronically, the software will handle that. While you're itemizing, look for any other deductions you can take, such as taxes, home mortgage interest, charitable donations or casualty losses.
Elle Smith has been an advertising professional for more than 25 years. Her work for ABC, CBS and Sony Pictures Television has appeared on radio, on air, in print and outdoors. In addition, Smith has more than 20 years experience in marketing, graphic arts, commercial photography and print production, and is a licensed real estate agent with property management certification in California.