New parents are often overwhelmed with the daunting expenses of having a baby, and medical expenses are typically as high as several thousand dollars. Particularly if you're stuck without insurance, this can make your first year of parenting your most expensive. But most baby-related medical expenses are tax-deductible, and these deductions can help you regain some financial stability when it's time to do your taxes.
Prenatal care will help keep you and your baby healthy, but can also be shockingly expensive. Most prenatal expenses, including ultrasounds, appointment fees, blood and urine tests, prenatal vitamins and medications prescribed by your doctor are deductible. If you seek out alternative care, such as from a chiropractor, midwife or acupuncturist, you can also deduct those expenses.
Depending on where and how you deliver your baby, giving birth can range from a few thousand dollars to $20,000 or more. You can deduct all of the costs associated with giving birth, including your epidural, hospital fees, circumcision and any other items you or your baby need. You can't deduct cosmetic surgery, spa treatments or other non-medical procedures, so if you get a tummy tuck or laser hair removal around the same time as your delivery, you'll have to pay these expenses.
While breastfeeding can help you save money, getting started can be challenging. Lactation consultants, breast pumps and other supplies are deductible as medical expenses associated with breastfeeding. Baby formula, however, is not tax-deductible.
If you choose to adopt a baby instead of giving birth, adoption is not a medical expense. However, you can deduct all expenses related to adopting your child up to $12,650. The Adoption Tax Credit is a non-refundable credit, which means it can reduce your tax liability to zero, but won't result in a tax refund.
How to Deduct
To claim the Adoption Tax Credit, you'll need to complete IRS Form 8839. If you're claiming medical expenses associated with having a baby, you have to itemize them on Schedule A of your tax return. There's one catch: You can only deduct expenses that exceed 7.5 percent of your adjusted gross income. If your expenses are less than that, you can't itemize and may be better off taking the standard deduction. Also note that you can't deduct expenses paid by insurance. Only out-of-pocket costs are deductible.
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.