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By Marcia Richards Suelzer, Toolkit Staff Writer
Nursing mothers know only too well that the breastfeeding while working outside the home can be both inconvenient and expensive, adding up to hundreds of dollars in the first year. The IRS has just provided some help with the cost by deciding that these expenses are medical expenses.
The IRS reversed its previous position because it concluded that breast pumps, as well as the related supplies that assist lactation are considered medical care, similar to obstetric care. Because the supplies used in the process are for the purpose of affecting a structure or function of the body of the lactating woman, these expenses are deductible medical expenses. Being designated as a medical expense also means that amounts paid can be reimbursed under flexible spending arrangements, Archer medical savings accounts, health reimbursement arrangements, or health savings accounts. However, if the expenses are reimbursed, they can not be claimed as medical expenses.
Think Ahead. Although these items are considered to be medical expenses, the standard requirements for medical expenses apply. First, you must itemize your deductions. Second, medical expenses are allowable only to the extent that they exceed 7.5% of your adjusted gross income. Thus, if your AGI in 2010 is $100,000, you cannot deduct the first $7,500 worth of medical expenses. Therefore, it is usually in your best interest to obtain reimbursement for these expenses, if it is possible to do so.
The IRS announcement did not define what are considered "supplies" that assist lactation. Therefore, it is unclear whether the cost of bottles or other storage containers, although necessary to the process, will be included as medical expenses. Although the IRS can act to implement a policy in favor of breastfeeding by allowing the cost of bottles to be deductible for breastfeeding mothers but not bottle-feeding mothers, it may chose to define "supplies" narrowly.
Tip. Given this uncertainty, it would be wise to keep records that separate clearly deductible expenses, such as the cost of the breast pump, from more problematic expenses, such as storage bottles, even though you might combine all the expenses when computing your deduction or putting in a claim for reimbursement. Having separate records will ensure that you don't lose your entire deduction if part of it is challenged.
Posted March 4, 2011.