When you’re itemizing your deductions at tax time, you want to take advantage of every deduction available to you. If you're pregnant or recently gave birth, you may be wondering if you can write off certain related medical expenses, including midwife costs. Typically, the answer is a qualified "yes" -- but there are a number of restrictions and exclusions.
Save all your receipts that had anything to do with your health, because your medical and dental expenses must total at least 7.5 percent of your adjusted gross income before you can start taking the deduction. In 2013, the threshold increases to 10 percent. For example, if your adjusted gross income is $40,000, you’ll be able to deduct medical expenses above $4,000. (That amount would be $3,000 for 2012.) You can count the premiums you paid for medical insurance if you don’t get it through your employer, as well as any co-pays you made if you have company-issued insurance.
If a midwife is not covered by your insurance and you choose to use the services, you may end up paying for the entire bill out of pocket. The kind of coverage you have doesn’t have anything to do with the amount you can deduct on your taxes. For example, your insurance company may pay for the hospital and physician services once you deliver a baby, but refuse to pay for the services of a midwife. You may have a policy that requires you to see a nurse midwife in order to be eligible for coverage. Either way, whatever part your insurance doesn’t cover, you can deduct on your 1040 IRS form.
Your midwife costs are deductible when the services are used to diagnose and treat you while you’re pregnant. After your baby is born, you can deduct midwife services rendered to the baby or yourself if they're medically necessary. In addition to being able to deduct the cost of midwifery services when they are medically related, you also can deduct the cost of transportation to and from your midwife’s office. When the service is deemed essential to your treatment, eligible transportation costs include the use of your car, trains, planes or buses, parking fees and tolls. You also can deduct the transportation costs of the midwife when you’re traveling if it’s medically vital to your treatment. The costs of medical supplies and diagnostic tests and equipment are deductible. The deductions qualify as long as you paid for the services in the tax year you planned on taking them, no matter when the services were actually provided.
Under the IRS rules, your midwife services may not be deductible. For example, you can’t take a deduction for using the midwife as a babysitter for your healthy baby or to run errands and clean the house for you. As a matter of fact, you can’t use the deduction for any kind of household services, even if they make your life easier once you’ve had a baby. Other pregnancy related items you can’t deduct include a diaper service, nutritional supplements and maternity clothes.
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."