What to Do If You’re Close to the 7.5% AGI Medical Deduction Threshold

The medical expense deduction is one of the most misunderstood — and often underutilized — deductions available to taxpayers who itemize. For the 2025 tax year, the IRS allows taxpayers to deduct unreimbursed qualified medical and dental expenses that exceed 7.5% of their adjusted gross income (AGI). If you’re close to that threshold, there are smart, strategic steps you can take to tip the scale in your favor and secure the deduction. This detailed guide will walk you through how to evaluate your position, what expenses to count, and practical actions to take if you’re nearing the medical deduction threshold.

Understanding the 7.5% AGI Threshold

The 7.5% threshold means that only the portion of your medical expenses that exceeds 7.5% of your AGI is deductible. For example, if your AGI is $80,000, the first $6,000 (7.5% of $80,000) in medical expenses is not deductible. Only the amount you spend above $6,000 is potentially deductible on your Schedule A, if you itemize.

That makes it crucial to evaluate your year-end position. If you’re just under the 7.5% mark, a few additional qualifying expenses could push you over the threshold and unlock a deduction that could save you hundreds, or even thousands, in taxes.

Step 1: Calculate Your AGI and Threshold

Start by determining your projected AGI for the year. Your AGI is your gross income (wages, dividends, capital gains, business income, etc.) minus adjustments like contributions to traditional IRAs, HSA deductions, student loan interest, and educator expenses.

Example: If your gross income is $90,000 and you have $5,000 in above-the-line deductions, your AGI is $85,000. 7.5% of $85,000 is $6,375. So only medical expenses above that amount may be deductible.

Step 2: Tally Your Qualified Medical Expenses

Next, add up your unreimbursed qualified medical expenses for the year. Make sure you only include amounts you paid out of pocket and were not reimbursed by insurance or covered by a Health Savings Account (HSA) or Flexible Spending Account (FSA).

Qualifying expenses include:

  • Doctor, dentist, and specialist visits
  • Hospital care, surgeries, and lab tests
  • Prescription medications
  • Health insurance premiums (if paid with after-tax dollars)
  • Dental and vision care, including eyeglasses and contact lenses
  • Hearing aids and batteries
  • Chiropractic and acupuncture treatments
  • Transportation and mileage to medical appointments
  • Medically necessary home improvements (e.g., wheelchair ramps)
  • In-home nursing or assisted living if for medical care

Document everything carefully, including receipts, mileage logs, and prescriptions if needed for tax purposes.

Step 3: Identify Optional Expenses You Can Accelerate

If you’re close to the threshold but haven’t crossed it, consider whether you can accelerate some qualified expenses into the current tax year. Bunching medical expenses into one year is a powerful way to meet the threshold.

Expenses you might choose to pay now include:

  • Elective procedures you’ve been postponing
  • Dental work such as crowns, fillings, or braces
  • New eyeglasses or contact lenses
  • Hearing aids or updates
  • Prepaying medical bills due in January
  • Additional physical therapy or chiropractic sessions
  • Purchasing durable medical equipment

Make sure the payments are made by December 31 to count in the current tax year. For credit card charges, the IRS considers the expense paid when charged — even if you pay the credit card bill later.

Step 4: Consider Adjusting Your AGI (if possible)

Since the 7.5% threshold is based on your AGI, lowering your AGI can make it easier to qualify for the deduction. Some strategies for reducing AGI include:

  • Maxing out contributions to a traditional IRA (if eligible)
  • Contributing to a Health Savings Account (HSA)
  • Making deductible contributions to a SEP IRA or Solo 401(k) if you’re self-employed
  • Harvesting capital losses to offset capital gains
  • Avoiding unnecessary Roth IRA conversions in high-AGI years

These strategies can help reduce your AGI and make more of your medical expenses deductible. Keep in mind that timing is key — most actions must occur before year-end.

Step 5: Run the Numbers to Compare Against the Standard Deduction

Even if you qualify for a medical expense deduction, you’ll only benefit if your total itemized deductions exceed the standard deduction. For 2025, the standard deduction amounts are:

  • $14,600 for Single filers
  • $21,900 for Heads of Household
  • $29,200 for Married Filing Jointly

Be sure to include other itemized deductions like mortgage interest, state and local taxes (up to $10,000), and charitable contributions. If your total deductions don’t exceed the standard amount, itemizing may not provide a benefit.

Step 6: Keep Meticulous Records

If you believe you may claim a deduction, organize your documentation now to support your claim:

  • Receipts for all medical payments
  • Insurance reimbursement statements
  • Credit card or bank records for proof of payment
  • Logs for mileage related to medical care
  • Doctor’s prescriptions for medically necessary equipment or services

Having complete records will make it easier to file your taxes accurately and protect you in case of an audit.

Example: Near the Threshold

AGI: $70,000
7.5% Threshold: $5,250
Current Qualified Medical Expenses: $4,900

In this scenario, you need an additional $350 in expenses to begin receiving a tax benefit. Consider accelerating any pending dental work, follow-up specialist visits, or other medical purchases to reach or exceed the threshold. The amount over $5,250 — even just $500 — is deductible and could make a meaningful difference if you’re itemizing.

What If You’re Just Under the Threshold?

If it looks like you’ll just barely miss the 7.5% threshold and you don’t have any additional qualifying expenses, it may be best to:

  • Postpone discretionary medical expenses to next year and bunch them with future expenses
  • Claim the standard deduction this year instead of itemizing
  • Focus on AGI-lowering tactics for future years

Remember, medical expenses can be carried forward only in the sense that if you pay in the future year, they apply to that year. There is no carryover of excess expenses if you fail to meet the threshold this year.

Conclusion: Don’t Miss the Opportunity

Being just under the 7.5% AGI medical expense deduction threshold doesn’t have to mean a lost opportunity. With a bit of planning — such as accelerating deductible expenses, reducing your AGI, or combining itemized deductions — you can often tip the balance in your favor. Even modest adjustments can make your medical spending partially deductible, reducing your overall tax bill.

If you find yourself close to the threshold near year-end, act quickly. Review your records, speak with healthcare providers about payment options, and consult a tax professional to determine the smartest way to maximize your 2025 deduction.

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