Want to know about the deductibility of medical expenses for orthodontia?

Last updated November 19, 2023

Deduction of Medical Expenses for Orthodontic Treatment

The average market price for braces costs between 700,000 yen and 1.5 million yen. This is by no means an inexpensive price. For this reason, we recommend that you use the "medical expense deduction," a government program for orthodontic treatment.

In this issue, we will explain in detail about the medical expense deduction, which reimburses a portion of the cost of medical treatment.

What is the "medical expense deduction" anyway?

◎This is a system under which a portion of the taxes paid is refunded.

The medical expense deduction is a system under which a portion of the taxes paid is refunded (returned). When you use a dental clinic or medical institution, you can receive a refund of a portion of the taxes you paid between January 1 and December 31 of the same year (one year).

Cases in which medical expenses of "more than 100,000 yen" were paid

The medical expense tax credit refund system is applicable in the following cases

◎How can I get my money back?

In order to receive a deduction for medical expenses, you must file an application when you file your tax return. By filing an application, a portion of the medical expenses paid during the year will be refunded to you.

Is orthodontic treatment a deductible medical expense?

◎Medical expenses are deductible as long as they are not for cosmetic purposes

Orthodontic treatment is a deductible medical expense.

However, the medical expense deduction can be applied only when the purpose is to improve mastication, pronunciation, or other functions.

It should be noted that orthodontic treatment for cosmetic purposes (because the patient wants to have beautifully aligned teeth) is not deductible as a medical expense, but since most orthodontic treatment also corrects problems in the bite together, it is safe to assume that in most cases the medical expense is deductible.

How much of my medical expense tax credit refund will I get back for orthodontic treatment?

The amount of refund (the actual amount you will get back) depends on the amount of your income.

The actual refund you will get back for the medical expense deduction. The amount of the refund depends on the amount of income. Those with higher income (who pay more income tax) will receive a larger refund, while those with lower income (who pay less income tax) will receive a smaller refund.

Refund Calculation Method

The refund calculation process is a bit complicated. This section provides tax rate tables and formulas, but if you start going into too much detail, you will probably get bogged down. So, for now, it is best to keep the following points in mind and then take your time to calculate the refund.

(1) First.1Calculate the total medical expenses paid during the year

(2) Next, calculate the amount of deduction for medical expenses (*Calculation formula)1)

(3) Check your income tax rate (*Calculation formula)2　*Table1)

(4) The actual refund amount is the amount of medical expense deduction multiplied by the income tax rate (*calculation formula).3)

The first step is to calculate the total amount of medical expenses for the year.

Calculate the total amount of medical expenses incurred during the year. It is important to note that there are two types of medical expenses: those that are "covered" and those that are "not covered" (not included in the total medical expenses). Please be careful in your calculations.

What is covered by medical expenses	Items not covered by medical expenses
Medical expenses necessary for treatment of illness ・Medication ・Hospitalization ・Examination ・Transportation expenses (cab fare is not covered) (however, if there is no transportation other than a cab to the medical institution, it may be covered in some cases), etc.	・Cosmetic purposes ・Vitamins for health promotion, etc. ・Parking fees ・Gasoline expenses when driving one's own car to the hospital or clinic ・Taxi fares, etc.

Part 2: Calculate the amount of deduction for medical expenses

［Formula 1.]

(Total medical expenses paid - Total insurance benefits) - 1010,000,000 yen or 101 TP3T of gross incomeWhichever is less = Medical Expense Deduction

After calculating the total amount of medical expenses incurred during the year, the next step is to calculate the "actual medical expenses incurred" and then the amount of medical expense deduction. The "actual medical expenses" are calculated by subtracting the medical expenses calculated in (1) from

Total amount of claims paid by life insurance, property insurance, etc.

and other insurance benefits (supplemental payments) are deducted.

Then, once you have calculated the actual medical expenses incurred, you can further

interpoint (interword separation)1010,000 yen or gross income10%The lesser of the following amounts

Subtract the amount of This amount is the deduction for medical expenses.

No. 3) Check your income tax rate.

Refer to Formula 2 below and Table 1 to determine your income tax rate and income tax deduction. Note that the "taxable income" in the formula is not the amount of salary paid (face value of salary). The amount of deductions is also not the "amount of refund (the amount of money you will get back). Please be sure not to make this mistake as well.

［Formula 2]

Amount after deduction of employment income - Total income deductions = Taxable income

[Table 1]

Amount of taxable income	tax rate	deduction (from)
Less than 1,950,000 yen	5%	0 yen
Over 1,950,000 yen and less than 3,300,000 yen	10%	97,500 yen
More than 3.3 million yen but less than 6.95 million yen	20%	427,500 yen
More than 6,950,000 yen and less than 9,000,000 yen	23%	636,000 yen
More than 9 million yen but less than 18 million yen	33%	1,536,000 yen
More than 18 million yen but less than 40 million yen	40%	2,796,000 yen
In excess of 40 million yen	45%	4,796,000 yen

No. 4 Subtract the amount of income tax multiplied by the income tax rate from the deduction for medical expenses.

Finally, refer to Formula 3 and multiply the medical expense deduction amount by the income tax rate. This amount is the amount that will be returned to you as a refund.

［Formula 3.]

Deduction for medical expenses × Income deduction rate = Refund amount

Specific example of the amount of 0 refund (simulation)

Taxable income 40010,000 yen, 1100 per year10,000,000 medical expenses (minus insurance coverage)

Income tax is ... 372,500 yen

4,000,000 yen (taxable income) x 20% (income tax rate) - 427,500 yen (income deduction) = 372,500 yen

The amount of refundable medical expense deduction is... 180,000 yen

900,000 yen (deduction for medical expenses) x 20% (income tax rate) = 180,000 yen

That is, of the ¥372,500 paid as income tax,180,000 yenwill be returned to you as a refund.

What documents are required to apply for the medical expense deduction?

The various documents required when applying for the deduction of medical expenses are as follows

If you apply at the counter or by mail, submit the original (not photocopies) of the following documents (photocopies of identification documents are acceptable for mailed applications). e-Tax applicants do not need to submit documents for 1. and 3. because they can fill out the various forms.

1....... Medical Expense Deduction Statement

This document contains a detailed statement of medical expenses paid during the year. The applicant is required to fill in the breakdown of medical expenses on the statement himself/herself. The statement can be downloaded from the IRS website.

2....... My Number and Identification Certificate

My number is required for application. If you have a My Number card, you only need one card. If you do not have a My Number card, you will need your My Number and a verification document to prove your identity (driver's license, etc.).

3... Certificate of Withholding Tax (if year-end adjustment was made)

If you are a salaried employee, such as an office worker or part-time worker, you are required to submit a gensen choshuhyo. If you are a sole proprietor, you do not need to submit a gensen choshuhyo.

4... Doctor's note (for adult orthodontic treatment)

If you have undergone adult orthodontic treatment, the tax office may require a medical certificate from your doctor. Some tax offices do not require a medical certificate, but if you are unsure, we recommend that you ask your dentist for one.

◎How to receive the refund?

Bring the notice of refund (tax refund notice) sent by mail from the tax office to the Japan Post Bank and receive the refund in cash at the counter.

∙ Register your bank account when you file your tax return and have the money deposited into your account.

These two types are available. You are free to choose either one, but if you do not want the hassle of going to the counter, we recommend that you register your designated bank account in advance when filing your tax return.

Summary

In this issue, we have explained the medical expense deduction available for orthodontic treatment.

Please keep the above three points in mind and take advantage of the medical expense deduction.

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