Is Therapy Tax Deductible? Read This Now

You've been going to therapy for a while now, and it's been helping you immensely. The regular sessions with your therapist have improved your mental health, helped you manage stress and anxiety, and provided you with the tools to cope with challenges in your life. But as tax season approaches, you start wondering - Can I deduct the cost of therapy on my taxes?

In this post, we are going to answer this common question and provide you with all the necessary information about claiming therapy as a tax deduction. This information may just help you not only regain your mental well-being, but also save some money in the process.

What Is Therapy?

Talk therapy, often referred to as psychotherapy, is a form of mental health treatment where individuals meet with a trained therapist to discuss and work through personal issues, emotions, and behaviors.

This type of therapy can take place in various formats, including individual, group, or family therapy sessions. The main goal of talk therapy is to help people understand their feelings, identify harmful patterns, and develop healthier coping strategies.

During therapy sessions, individuals talk openly with their therapist in a safe, confidential setting. This allows them to explore their thoughts and feelings without fear of judgment. Therapists are trained to listen carefully, ask insightful questions, and provide guidance based on psychological principles. This process can be beneficial for dealing with a wide range of issues, from anxiety and depression to relationship problems and stress management.

Talk therapy is not just for those with severe mental health conditions. It can be valuable for anyone looking to improve their emotional well-being and personal growth.

Can I Deduct Therapy From My Tax Returns?

Therapy costs can be tax deductible under certain conditions, primarily if they qualify as medical expenses on your tax return. Here are some conditions that can make your therapy fees tax-deductible.

Doctor-Prescribed Condition

If your therapy sessions are recommended by a healthcare professional to treat a specific medical condition, they may qualify as a tax-deductible expense.

For example, if a doctor prescribes therapy for anxiety or depression, the cost of therapy can be considered part of your medical care expenses.

Treatment of a Diagnosed Medical Condition

Should your therapy be part of a treatment plan for a diagnosed condition, its costs can be included as medical expenses.

Suppose you have been diagnosed with PTSD, and therapy is part of your treatment, then you may be able to deduct the cost on your tax return.

Costs Exceed 7.5% of Adjusted Gross Income

To qualify for a deduction, your total medical expenses need to exceed 7.5% of your adjusted gross income (AGI). Only the amount above this threshold is deductible. For instance, if your AGI is $50,000, expenses exceeding $3,750 can be deducted.

Travel Expense for Medical Care

If you need to travel to receive medical care, such as therapy, these travel expenses include costs like mileage, parking fees, and tolls. If you drive 30 miles to a therapist’s office, you can deduct these travel expenses as part of your medical expense deduction.

What Types of Therapy Are Not Tax deductible?

When it comes to therapy, not all types are tax deductible. Here are some types of therapy that typically do not qualify.

Marriage Counseling

This type of therapy is generally aimed at improving or resolving relationship issues.It is considered to enhance general health rather than treat a specific medical condition. For instance, couples seeking help from an employed therapist to improve communication would not be able to deduct these costs as medical expenses.

Life Coaching

Life coaching focuses on personal development and achieving personal goals. It is often categorized as a business expense for self-improvement rather than a medical necessity. For example, someone working with a coach to enhance social skills would not have these sessions considered deductible as medical expenses.

Nutrition Counseling

While beneficial for overall well-being, nutrition sessions are often seen as addressing general health rather than a specific medical issue unless part of a medical treatment plan. Consulting a nutritionist through professional organizations for a healthier lifestyle typically does not qualify for a tax deduction, unless specifically prescribed by a doctor.

Non-Medical Personal Therapy

Therapy aimed at personal growth, career development, or self-exploration without a medical diagnosis does not qualify. For example, someone engaging in therapy purely for personal development purposes would not be able to deduct the costs unless it was medically necessary.

Get Advice from the Best Tax Resolution Experts

The cost of therapy can be tax-deductible provided it meets certain criteria. It is always recommended to consult with a tax professional or accountant for specific advice regarding your own situation. They can provide valuable guidance on what expenses may be considered deductible and how to properly document them for tax purposes.