Healthcare costs in the U.S. can be substantial, but the IRS offers some relief through the medical expense deduction. If your qualified medical expenses exceed a certain percentage of your adjusted gross income (AGI), you may be able to deduct the excess on your tax return. Understanding which expenses qualify, how to calculate your deduction, and how to report it properly can help you reduce your taxable income and increase your refund. This detailed guide explains everything you need to know.
Who Can Claim the Medical Expense Deduction?
The medical expense deduction is available to taxpayers who itemize their deductions on Schedule A of Form 1040. You cannot claim this deduction if you choose the standard deduction. To benefit, your total itemized deductions must exceed your standard deduction amount.
For the 2025 tax year, the standard deductions are:
- Single filers: $14,000
- Married filing jointly: $28,000
- Head of household: $20,800
If your total itemized deductions (including medical, mortgage interest, state/local taxes, etc.) exceed the above, then itemizing may yield a better tax result.
Threshold for Deductibility
You can deduct unreimbursed medical expenses that exceed 7.5% of your AGI. Only the portion above this threshold is deductible.
Example: If your AGI is $60,000, 7.5% equals $4,500. If you had $9,000 in qualified medical expenses, you can deduct $4,500 ($9,000 – $4,500).
Who’s Covered?
You can deduct qualified expenses you paid for yourself, your spouse, and your dependents. In some cases, you can also deduct expenses for someone you could have claimed as a dependent, even if you did not actually claim them.
What Medical Expenses Qualify?
The IRS defines qualified medical expenses as costs incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatments affecting any part or function of the body. The following categories generally qualify:
Doctor and Hospital Costs
- Office visits and specialist consultations
- Hospital services, surgery, and nursing services
- Lab tests, X-rays, and other diagnostic procedures
Prescription Drugs and Insulin
- Prescribed medications (not over-the-counter unless prescribed by a doctor)
- Insulin, even without a prescription
Mental Health Services
- Psychotherapy and counseling
- Psychiatric care and prescription medications
Dental and Vision Care
- Routine and corrective dental care, including fillings and braces
- Eye exams, glasses, contact lenses, and eye surgery (e.g., LASIK)
Health Insurance Premiums
- Premiums for medical, dental, and vision plans if paid with after-tax dollars
- Long-term care insurance (within IRS age-based limits)
- Note: Premiums paid with pre-tax dollars through an employer plan are not deductible
Medical Equipment and Supplies
- Wheelchairs, walkers, crutches, and hearing aids
- Medical mattresses and CPAP machines
- Glucose monitors and test strips
Transportation and Lodging
- Mileage for driving to and from medical appointments (at the IRS medical mileage rate)
- Public transportation, taxis, or ambulance services to receive care
- Lodging (up to $50 per night per person) if traveling out of town for medical treatment
Other Qualified Expenses
- Smoking cessation programs and prescribed medications
- Weight-loss programs prescribed to treat a specific medical condition
- In-vitro fertilization and fertility treatments
- Guide dogs and other service animals
What Expenses Do NOT Qualify?
The following common expenses are not deductible:
- Cosmetic surgery (unless medically necessary)
- Over-the-counter medications (unless prescribed)
- General health items like vitamins or gym memberships (unless prescribed)
- Non-prescription birth control and toiletries
- Medical marijuana (even if legal in your state)
- Health club dues not directly tied to medical care
How to Report Medical Expense Deductions
To claim medical expenses, you must itemize your deductions on Schedule A (Form 1040).
Steps:
- Add all qualified medical and dental expenses.
- Subtract 7.5% of your AGI from the total expenses.
- Report the difference on Line 1 of Schedule A.
- Total your other itemized deductions and enter them on Form 1040, Line 12a if they exceed the standard deduction.
Documenting and Saving Receipts
To protect yourself in the event of an audit, maintain accurate records of:
- Medical bills and receipts
- Pharmacy printouts of prescriptions
- Mileage logs for medical travel
- Insurance explanation of benefits (EOBs)
- Canceled checks and credit card statements
It’s best to create a folder or digital file organized by year and type of expense.
Medical Expenses and Health Savings Accounts (HSAs)
Do not double-dip! If you paid a qualified expense using funds from a Health Savings Account (HSA) or Flexible Spending Account (FSA), that expense is not deductible—because it was already paid with pre-tax dollars. Only out-of-pocket expenses paid with after-tax money are eligible for deduction.
Strategy Tips to Maximize the Deduction
- Bunch expenses: If you have control over timing, try to group elective surgeries or treatments in the same tax year to exceed the 7.5% AGI threshold.
- Pay bills by year-end: You must pay the expense in the tax year for it to count, even if treatment is in the future.
- Track minor expenses: Small items like bandages, copays, or eye drops can add up over time and help you reach the threshold.
Conclusion
The medical expense deduction is a valuable tool for taxpayers with high out-of-pocket health costs, especially if you itemize deductions. By knowing what qualifies, keeping accurate records, and planning your expenses strategically, you can significantly lower your taxable income and possibly increase your refund. While navigating medical deductions may seem complex, a little preparation can go a long way toward better financial outcomes during tax season.
