Are Braces Tax Deductible? Understanding the Tax Implications of Orthodontic Expenses

Thanks to Pierre Fauchard, the father of modern dentistry, braces have been in existence now for the best part of 300 years. 

There’s often a great deal of confusion when it comes to the realm of taxes and deductions. One question that frequently pops up is, “Are braces tax deductible?” Let’s break it down in an easy-to-understand table.

In simple terms, if braces are deemed a necessary medical expense, they can be tax deductible. However, if they are purely for cosmetic reasons, they are not. The situation can vary, so it’s always best to consult with a tax professional.

What are Tax Deductible Medical Expenses? 

Navigating the tax world can be a maze, but here’s a ray of light: The IRS permits deductions for medical expenses on your tax returns that exceed 7.5% of your Adjustable Gross Income (AGI). This intriguing provision includes dental expenses, whether they’re for you or a dependent. So, yes, that means your dental costs can mingle with other medical expenses on your tax return. 

Ever wondered what falls under tax-deductible medical expenses? Well, it’s quite comprehensive, spanning payments to doctors, dentists, and surgeons, and covering both inpatient and outpatient care. It even includes treatments or medications. This means your dental costs, including those shiny braces, could have a silver lining come tax season.

Dental expenses aren’t just about cleanings and check-ups. They can also include treatments, and yes, even braces. Plus, any prescribed items or medications can be included, adding to your potential deductions along with all other medical expenses for the year. So, keep those receipts and make tax season a little less taxing!

Understanding the 7.5% Threshold 

If you or one of your dependents has been in hospital or had dental treatment during the tax year, you need to keep your receipts for a reduction at the end of your tax return. The IRS offers a 7.5% threshold on medical expenses, including dental costs allowing you to claim expenses. 

For example, a tax return filed at the end of the year can deduct medical expenses of more than 7.5% from their adjusted gross income from the previous year. If your adjusted gross income is $40,000, for instance, anything above the first $3,000 of medical bills can come off your return. 

Can Braces be Considered Tax Deductible? 

As a general rule, the IRS defines medical expenses as costs for diagnosis, cure, mitigation, treatment, or prevention of disease. This includes the costs of equipment, supplies, and devices needed for these purposes. So, if your braces fall under this category, they could potentially be tax deductible.

If your orthodontic treatment is medically necessary, then yes, your braces could very well be tax deductible. The challenge here is determining whether your braces are a medical necessity or a cosmetic choice. This is a decision that should be made in consultation with your orthodontist.

How to Claim Tax Deduction 

Claiming deductions may differ depending on whether you are an individual or a business, and all of the official processes for tax deductions can be found on the official IRS website. Tax deductions for medical reasons can be found on Schedule A, the section for itemized expenses. 

Schedule A allows you to itemize your tax deductions, but to do this, you will need to have a record of them; you will also need to have receipts and proper documentation for proof. Remember, if you have any dependents or a spouse, you will need to keep their receipts too. 

Filing a tax return to the IRS is much easier these days, thanks to modern digital infrastructure. First, you will have to visit the IRS website and open an account; then, you can follow the guidelines and resources to prepare and file your return so that you pay the right tax each year.

Considerations and Limitations 

The IRS offers a range of deductions for your tax return, but there are some limitations. For instance, an overall limitation of $10,000 for combined tax deductions for an individual includes medical and dental expenses. The limitation is $5,000 for those who are married. 

The tax return must also be adjusted to account for any insurance reimbursement payments made during the previous year. Any payments or credits made for deductible medical costs to you or to a hospital or physician must be accounted for in your final tax assessment. 

Resources and Tools 

Calculating your tax return deductions for medical expenses doesn’t need to be difficult; it can be straightforward thanks to the tax deductions calculator you can find on the IRS website. Make use of these convenient resources to ensure you pay the correct amount of tax. 

Conclusion 

In conclusion, while the cost of braces can be quite the financial burden, it’s critical to remember that they’re an investment in your dental health.

There are several alternative avenues to explore:

• Flexible Spending Accounts (FSAs) – These allow you to set aside pre-tax dollars for health expenses, including orthodontic treatments.
• Health Savings Accounts (HSAs) – If you have a high-deductible health plan, you can use this account for orthodontic expenses, reducing your taxable income.
• Insurance plans – Some insurance plans cover a portion of orthodontic treatment costs. Make sure to thoroughly check your policy.

Remember, it’s always best to consult with a tax professional or your orthodontist to better understand your options and potential savings. Every penny saved brings you closer to the smile you’ve dreamed of.

While braces might not always offer a tax break, they certainly offer a confidence boost that’s truly priceless. Wear your braces with pride, knowing you’re investing not just in your smile, but also in your well-being and future.

Sources :

https://www.sciencedirect.com/science/article/abs/pii/S1073874613000157

https://www.irs.gov/