The Internal Revenue Service (IRS) explains that a tax deduction works by lowering the amount of your taxable income, so you end up owing less in taxes.
Maximizing applicable tax deductions can result in a larger tax refund. There is a plethora of deductions that are missed each year, simply because people are unaware of what constitutes a qualified deduction. Tax deductions are divided into several categories, one being medical expenses, and in this category are a way to get reimbursed for any out-of-pocket costs you may have incurred relating to certain healthcare services.
The IRS asserts “medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.” Substance use disorder (SUD), also known as addiction, is listed as a chronic mental health disorder in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5). Since addiction is a diagnosable disease, rehabilitation (rehab) for substance use disorder falls within these limitations, and depending on various factors, can sometimes be tax-deductible. The IRS deems the following as valid deductible medical expenses as it pertains to substance use disorder:
- Payments or fees to doctors, psychiatrists, and psychologists.
- Payments for inpatient treatment at a center for alcohol or drug addiction.
- Payments for transportation to a medical facility. This can include fare for a taxi, bus, train, ambulance, or fuel costs to get transportation by personal vehicle, or the amount of the standard mileage rate for medical expenses, plus the cost of tolls and parking.
When applicable, this deduction applies whether the individual, their spouse, or their dependent attends a rehab program. In many cases, the cost of taxes is among the most expensive yearly financial commitments and taking advantage of any applicable tax breaks to reduce the amount owed can make a difference. There are basic online tools and tax calculators that can help you figure out an estimate of your yearly tax payment. The best way to know exactly how much you will end up paying in taxes is to consult a tax professional. They can not only help you figure out your financial tax commitment but can also help you integrate a tax planning strategy that can provide a solid foundation to set you up for future years.
For Information and Support
Contemplating detox can be a very challenging time. Before any individual can begin to work on the underlying issues contributing to their substance abuse problem, they must be separated from the substances in their systems. If you are concerned for yourself or a loved one regarding substance abuse, and/ or addiction we recommend reaching out for help as soon as possible. The earlier you seek support, the sooner you and your loved ones can return to leading happy, healthy, and fulfilling lives. Sherwood Detox offers a stand-alone detox program. For additional information on detox, please do not hesitate to contact us at: 818-626-9959 or feel free to email us anytime. One of our trusted counselors is available to talk and discuss how we can best support you on your journey.
