Most taxpayers can claim medical expenses that exceed 7.5% of their adjusted gross incomes (AGIs), subject to certain rules. Though the deduction seems simple, there are a variety of rules about taking the deduction that you should know before filing your taxes.
Key Takeaways
- You can deduct medical expenses across a wide range of categories.
- You cannot deduct expenses paid for items like vitamins that provide general health benefits.
- Many transportation-related expenses relevant to your medical care can be deducted.
- Employer-sponsored health care premiums usually aren't deductible, but you can deduct premiums for Medicare Part B and Part D.
Allowable Medical Expense Deductions
The IRS defines qualifying medical expenses as those related to the "diagnosis, cure, mitigation, treatment, or prevention of a disease or condition affecting any part or function of the body." To be tax deductible, a medical expense generally must be legal and meet IRS conditions, which include:
- Any medical services from physicians, surgeons, dentists, and other medical professionals related to the diagnosis, cure, mitigation, treatment, or prevention of disease
- Any costs for medications prescribed by a medical professional
- Any costs for medical devices, equipment, and supplies prescribed by a medical professional, such as eyeglasses
- Expenses associated with transportation to and from medical care
- Long-term care services
- Insurance for medical care or long-term care
Expenses that are merely beneficial to general health, such as vitamins, aren't covered.
Medical-Related Transportation Costs
You can deduct the cost of transportation to and from a health care facility or treatment if the trip is primarily for medical care and is essential. The following expenses can be included in the cost of medical-related transportation:
- Bus, taxi, train, and plane fares
- Ambulance service
- Transportation expenses of a parent who has to go with their child who needs medical care
- Transportation expenses of a nurse who travels with the patient and provides care because the patient can't travel alone
- Transportation expenses for regular visits to see a dependent who is mentally ill, as long as the visits are recommended as a part of treatment
Note
You can deduct the miles using the standard mileage rate for medical purposes if you travel by car. For medical driving, It's 18 cents per mile in tax year 2022 You can add the cost of parking and road tolls to this rate.
Who Can Receive Treatment?
You can deduct medical expenses paid for yourself, your spouse, and your dependents. You might also be able to deduct expenses for someone you don't actually claim as your dependent, but you could have done so except for any of the following circ*mstances:
- You didn’t claim your child as a dependent because of the rules for children of divorced or separated parents.
- You didn’t claim an individual as a dependent on your return because that person earned $4,300 or more in gross income as of 2021, or because they filed a joint return.
- You or your spouse (if married filing jointly) can't be claimed as a dependent on someone else's return.
The Deduction and Your AGI Threshold
You can calculate the 7.5% rule by tallying up all your medical expenses for the year, then subtracting the amount equal to 7.5% of your AGI. For example, if your AGI is $65,000, your threshold would be $4,875, or 7.5% of $65,000. You can find your AGI on Form 1040.
If you spent $10,000 on qualified medical expenses, then you could deduct $5,125—the balance over that $4,875 threshold.
You Must Itemize to Claim the Deduction
You must itemize your deductions to claim medical expenses. This means you must complete and file Schedule A with your tax return. It could be worth your while if you're eligible to claim several other itemized deductions as well, so they all add up to more than the year's standard deduction. The deduction amount for tax year 2022 ranges from $12,950 to $25,900, and $13,850-$27,700 in tax year 2023.
Note
You can't claim the standard deduction and itemize, too—it's one or the other.
You'd pay taxes on more income than you have to if you don't claim the standard deduction and if you don't have itemized deductions that total more than the applicable standard deduction amount.
If you choose to itemize, you can deduct your medical expenses starting on Line 1 of Schedule A. Complete Lines 2 and 3 to calculate your threshold limitation on medical expenses. Lastly, Line 4 shows how much you can deduct.
Pre-Tax Expenses Aren't Deductible
Only medical expenses that aren’t reimbursed by your insurance can be included in the medical expense deduction. For example, say you have a prescription medication that costs $50, and your insurance company pays $20. You pay $30. With the medical expense deduction, you can only deduct the $30.
Similarly, any medical expenses paid from a flexible spending account, a health savings account (HSA), or a health reimbursem*nt arrangement aren't included in the itemized deduction for medical expenses. These accounts already provide a tax advantage, and you can't double dip.
Special Rules for Some Health Insurance
You can deduct premiums for health, dental, and vision care insurance, but only if the premiums are paid with after-tax dollars. Those who have group insurance through their employers usually pay these premiums with pretax dollars.
You can deduct Medicare Part A premiums, but only if you aren't covered under Social Security and are voluntarily enrolled in Medicare Part A. Medicare Part B and Part D premiums are deductible, too.
Note
You can only deduct medical expenses in the year you paid them. In general, you can't deduct payments made for services that will take place in a future year.
Frequently Asked Questions (FAQs)
How much medical expense is tax deductible?
You can deduct qualifying medical expenses that exceed 7.5% of your adjusted gross income. You must itemize your deductions to be able to claim medical expenses on your tax return.
How do you claim medical expenses on your taxes?
You can tally your medical expenses on Schedule A and then record your total on Form 1040 when you file your taxes.
