If you are suffering from a substance abuse issue, it is…
While people choose to seek treatment for drug or alcohol addiction for many reasons, one of those reasons is the cost of addiction. People who are using may spend money they do not have in an effort to get more drugs. This can even lead to related criminal behavior. There is also a possibility that you can deduct your drug rehab from your taxes.
One of the ironies of addiction is that, while using substances is expensive, so is medically assisted treatment. Getting sober without medical care is not only less effective, it can be downright dangerous depending on the strength of your addiction, the substances you use, and your underlying medical condition.
Fortunately, there are ways to help you offset the costs of rehab. One of them is a federal income tax deduction for some types of treatment for substance-abuse disorders. Not all people qualify for these tax deductions, but for those that do, the deductions can go a long way to easing the burden of your out-of-pocket costs for rehab.
The IRS allows you to deduct medical expenses if those medical expenses are more than 7.5% of your adjusted gross income. Any amount in excess of 7.5% become deductible. Obviously, because that number is based on your income, how much of your rehab costs will be tax deductible depends on your personal financial situation. For a person with an adjusted gross income of $100,000 a year, any amount over $7,500 is deductible.
You cannot deduct expenses that you did not directly pay. For example, you cannot deduct what your insurance pays for rehab. However, if you directly pay for your health insurance, you may be able to deduct premiums as one of your medical expenses. If you have employee-sponsored health insurance, you probably already pay for your medical benefits with pre-tax dollars, so you cannot deduct premiums from your taxes.
Most common medical treatments for addiction do qualify as medical expenses under the IRS rules. Generally, any cost associated with diagnosis, treatment, prevention, and medical services will qualify. For rehab, that can include payments to health professionals, inpatient center payments, and even transportation costs to rehab facilities.
At Greater Essex, we understand that rehab can be financially daunting. While we cannot prepare your taxes, we will do everything we can to ensure you have the documentation you need to claim the deductions you deserve. To contact us for more information about our rehab program, give us a call. We would be happy to answer any questions you may have about any part of the drub rehab process and how it affects your taxes.