When a family is trying to have a baby, it seems like nothing else in the world matters.
In recent years, science has made great progress in giving families this gift through In Vitro Fertilization (IVF).
At 19-years-old, I had heard that egg donation was a great way to make money.
I didn't realize I would owe the IRS money when I received my check.
Tax issues of IVF are rarely thought of by either the recipients or the donors, but it's important to know the role the IRS plays in this process.
IVF and Taxes.
From the prospective parents' standpoint, IVF costs around $20,000 in the United States.
This cost covers medical fees, drugs, and the basic IVF procedures.
 IVF fees are tax deductible and it is strongly encouraged that you keep detailed records and bills from all procedures.
 You can list these deductions on form 1040 of your tax return.
Not all insurance companies will cover IVF.
However, if yours does, please remember that only a portion of the costs are deductible.
Taxes and Specimen Donation.
Being selected as a donor isn't guaranteed for either men or women.
There are extensive tests and interviews in the screening process.
Usually, the clinic will absorb the cost of these and deduct them in their own return.
When handled by a third party, like a clinic or agency, egg donors can receive anywhere from $5,000 to $6,000 per donation.
Egg donation is considered self employment.
You will receive a 1099 misc and have to file the income on your 1040.
When I donated my eggs, I went through five procedures in one year.
I made $20,000 but was completely unaware that I would be taxed on it.
It wasn't until I received my 1099 that I realized, for the first time, I would owe the IRS money.
For a broke college student, $1,600 was pretty hard to part with.
Sperm donation falls under the same rules as egg donation, yet compensation is quite a bit less.
 Fees vary from $30 to $200 per sample.
Sperm banks usually require a commitment from their donors of about six months to a year, in which they're required to donate one sample per week.
On average, a sperm donor can expect to make about $2,000 for a full cycle.
They, too, will receive a 1099 and are expected to report it on their return.
What If I Don't Report It?         Both the clinic and the family receiving IVF will be able to deduct the cost of the procedure on their tax returns, so the IRS will be aware that some of the money hasn't been reported.
If you fail to file your 1099 misc, you will face fees and penalties by the IRS.
It seems strange that the IRS would have a say in anything as personal as getting pregnant.
In the end, though, the cost to the IRS doesn't matter if a loving couple ends up with the baby of their dreams.
In recent years, science has made great progress in giving families this gift through In Vitro Fertilization (IVF).
At 19-years-old, I had heard that egg donation was a great way to make money.
I didn't realize I would owe the IRS money when I received my check.
Tax issues of IVF are rarely thought of by either the recipients or the donors, but it's important to know the role the IRS plays in this process.
IVF and Taxes.
From the prospective parents' standpoint, IVF costs around $20,000 in the United States.
This cost covers medical fees, drugs, and the basic IVF procedures.
 IVF fees are tax deductible and it is strongly encouraged that you keep detailed records and bills from all procedures.
 You can list these deductions on form 1040 of your tax return.
Not all insurance companies will cover IVF.
However, if yours does, please remember that only a portion of the costs are deductible.
Taxes and Specimen Donation.
Being selected as a donor isn't guaranteed for either men or women.
There are extensive tests and interviews in the screening process.
Usually, the clinic will absorb the cost of these and deduct them in their own return.
When handled by a third party, like a clinic or agency, egg donors can receive anywhere from $5,000 to $6,000 per donation.
Egg donation is considered self employment.
You will receive a 1099 misc and have to file the income on your 1040.
When I donated my eggs, I went through five procedures in one year.
I made $20,000 but was completely unaware that I would be taxed on it.
It wasn't until I received my 1099 that I realized, for the first time, I would owe the IRS money.
For a broke college student, $1,600 was pretty hard to part with.
Sperm donation falls under the same rules as egg donation, yet compensation is quite a bit less.
 Fees vary from $30 to $200 per sample.
Sperm banks usually require a commitment from their donors of about six months to a year, in which they're required to donate one sample per week.
On average, a sperm donor can expect to make about $2,000 for a full cycle.
They, too, will receive a 1099 and are expected to report it on their return.
What If I Don't Report It?         Both the clinic and the family receiving IVF will be able to deduct the cost of the procedure on their tax returns, so the IRS will be aware that some of the money hasn't been reported.
If you fail to file your 1099 misc, you will face fees and penalties by the IRS.
It seems strange that the IRS would have a say in anything as personal as getting pregnant.
In the end, though, the cost to the IRS doesn't matter if a loving couple ends up with the baby of their dreams.