When filing your federal tax return using Form 1040 in 2025, Schedule A allows taxpayers to itemize their deductions instead of taking the standard deduction. One of the most significant categories under Schedule A is medical and dental expenses. However, not all medical costs are deductible, and understanding what qualifies is crucial to maximizing your potential tax benefits.
Understanding the 7.5% AGI Threshold Rule
To deduct medical expenses on Schedule A, they must exceed 7.5% of your adjusted gross income (AGI) for the tax year. Only the portion of expenses that surpasses this threshold is deductible. For example, if your AGI is $80,000, you must have unreimbursed medical expenses greater than $6,000 to begin claiming a deduction.
Who Can You Include in Medical Expense Deductions?
You can deduct qualifying medical expenses paid for yourself, your spouse, and your dependents. You may also deduct expenses for a person who would have been your dependent except for failing to meet the gross income or joint return test, provided you provided more than half of their support.
Qualifying Medical Expenses
The IRS provides a detailed list of allowable medical deductions in Publication 502. Below are the major categories and examples of deductible expenses:
1. Payments to Medical Providers
- Fees for doctors, surgeons, dentists, chiropractors, and other licensed medical professionals
- Psychiatric or psychological services
- Hospital services, including room and board if the primary reason for admission is to receive medical care
2. Prescription Medications
- Costs for prescribed drugs and insulin
- Prescription eyeglasses, contact lenses, and associated equipment
- Hearing aids and batteries
3. Medical Equipment and Supplies
- Wheelchairs, crutches, braces, prosthetic limbs
- Home medical equipment prescribed by a physician
- Oxygen and necessary breathing apparatus
4. Insurance Premiums
- Health insurance premiums, including COBRA coverage
- Medicare Part B and Part D premiums
- Long-term care insurance premiums (subject to age-based limits)
5. Transportation for Medical Care
- Cost of gas and oil when driving for medical purposes (21 cents per mile for 2025)
- Public transportation, taxi, and ambulance fees
- Parking fees and tolls incurred during travel to receive care
6. Rehabilitation and Therapy
- Alcoholism and drug addiction treatment programs
- Smoking cessation programs (prescribed by a doctor)
- Weight-loss programs for a physician-diagnosed condition (e.g., obesity, hypertension)
7. Home Improvements for Medical Reasons
- Installing ramps, widening doorways, or modifying bathrooms for accessibility
- Only the portion of the improvement cost that exceeds the increase in property value is deductible
What Expenses Are Not Deductible?
It’s equally important to understand which medical costs are not deductible. These include:
- Cosmetic surgery that is not medically necessary
- Health club dues, unless prescribed for a diagnosed medical condition
- Over-the-counter medicines (unless insulin or prescribed by a doctor)
- Funeral or burial expenses
- Non-prescription vitamins and supplements
Recordkeeping Requirements
To claim medical deductions, maintain detailed records including:
- Receipts, bills, and statements from medical providers
- Proof of payment (e.g., credit card or bank statements)
- Prescription orders for drugs or devices
- Mileage logs and travel records for medical visits
The IRS recommends retaining these records for at least three years from the date you file your tax return.
How to Report Medical Expenses on Schedule A
Medical and dental expenses are reported on Schedule A, which is submitted along with Form 1040. On Schedule A:
- Enter the total qualified medical expenses on Line 1
- Enter your AGI on Line 2
- Multiply your AGI by 7.5% and enter on Line 3
- Subtract Line 3 from Line 1 and enter the result on Line 4 — this is your deductible amount
Should You Itemize or Take the Standard Deduction?
In 2025, the standard deduction is expected to be approximately $15,750 for single filers and $31,500 for married couples filing jointly. You should itemize only if your total itemized deductions (medical, mortgage interest, state taxes, etc.) exceed the standard deduction. Many taxpayers with substantial medical bills — particularly seniors or those with chronic illnesses — may find itemizing beneficial.
Conclusion
Claiming medical expense deductions on Schedule A for 2025 can lead to significant tax savings, but only if you understand what qualifies, keep detailed records, and meet the AGI threshold. Carefully review your medical costs, consult IRS Publication 502, and consider working with a tax professional if you have complex circumstances or high expenses. This strategic approach could help lower your taxable income and maximize your refund.
