Overview
Medical expenses can be a meaningful source of tax relief for taxpayers who itemize deductions. The tax code allows you to deduct qualified medical and dental costs that you paid for yourself, your spouse, or your dependents — but only to the extent those costs exceed a percentage of your adjusted gross income (AGI). As of 2025 that floor is 7.5% of AGI (see IRS Publication 502). This article explains what counts, what doesn’t, how to calculate the deductible amount, recordkeeping best practices, and planning strategies I recommend in practice.
Who can claim medical expense deductions?
- You must itemize deductions on Form 1040 Schedule A to claim medical expenses. If your total itemized deductions (including state and local taxes, mortgage interest, charitable gifts, etc.) don’t exceed the standard deduction for your filing status, you generally won’t claim medical expenses.
- You can include expenses you paid for yourself, your spouse, and your qualifying dependents, even if a dependent isn’t claimed on your tax return (see IRS rules for who qualifies).
- Reimbursed expenses aren’t deductible. If an insurer, employer plan, or another party reimburses you, you must subtract those reimbursements from the expenses you report.
References: IRS Publication 502, Tax Topic 502.
What counts as a deductible medical expense?
Below are common categories the IRS recognizes. The list is not exhaustive; always check IRS Publication 502 for detailed rules and examples.
- Medical and dental care: Doctor visits, hospital services, surgeries, lab tests, xrays, and dental work (including fillings, extractions, and braces) that are medically necessary.
- Prescription drugs and insulin: Costs for prescriptions written by a licensed practitioner. Over‑the‑counter medicines are generally not deductible unless prescribed.
- Health insurance premiums: Premiums for policies that pay for medical care may be deductible if you itemize. This includes some Medicare premiums (Parts B and D) and COBRA premiums; however, employer‑paid pre‑tax premiums typically cannot be separately deducted. Self-employed taxpayers may have a different treatment (see below).
- Long‑term care: Qualified long‑term care services and insurance premiums may be deductible under Pub 502 with age‑based limits and special rules.
- Medical equipment and supplies: Wheelchairs, crutches, oxygen equipment, prosthetics, and other necessary devices.
- Hearing aids and vision care: Eye exams, eyeglasses, contact lenses, and surgery such as LASIK when medically necessary.
- Home modifications: Reasonable costs of home improvements that are necessary for medical care (for example, installing ramps or widening doorways) may be deductible to the extent they exceed any increase in property value.
- Transportation and lodging: The cost of getting to medical care (mileage, public transportation, taxi, or parking) can be deductible. You can use actual expenses or the IRS medical mileage rate—check the current rate each year. Lodging near a medical facility may qualify if the travel is primarily for, and essential to, medical care and certain rules are met.
Common non‑deductible expenses
- Cosmetic surgery that is purely elective (unless needed to improve a deformity from disease, injury or congenital abnormality).
- General health items: vitamins, gym memberships, and most over‑the‑counter medicines (unless prescribed).
- Nonmedical personal expenses at a medical facility (e.g., phone or TV charges) unless required for care.
- Costs reimbursed by insurance or paid with pre‑tax dollars from an employer plan.
Special rules to watch
- Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs): Qualified medical expenses paid with HSA or FSA dollars are not deductible, because contributions to HSAs and many FSAs are pre‑tax or tax‑favored. However, HSA‑qualified expenses generate tax‑free distributions; you can keep receipts to reimburse yourself later and use deductions strategically — see our guide on using HSAs for big medical expenses for details (https://finhelp.io/glossary/using-hsas-for-big-medical-expenses-a-practical-guide/).
- Self‑employed taxpayers: Self‑employed individuals may be able to deduct health insurance premiums on the front page of Form 1040 (above the line) subject to rules, which is different from Schedule A medical deductions.
- Long‑term care premiums: Allowed as medical expenses up to IRS age‑based dollar limits; these limits change annually.
- Capital improvements: If a home modification is primarily for medical care, the cost is deductible as a medical expense, minus any increase in fair market value.
How the AGI threshold works (example)
- Add up all qualified medical expenses you paid in the tax year.
- Multiply your AGI by 7.5% to calculate the floor.
- Subtract the floor from your total qualified expenses; the remainder is the deductible amount on Schedule A.
Example: AGI $60,000; qualified medical expenses $8,000. Floor = $60,000 × 7.5% = $4,500. Deductible portion = $8,000 − $4,500 = $3,500.
Practical recordkeeping tips (what I do with clients)
- Keep receipts, EOBs (explanation of benefits), prescriptions, and cancelled checks. For mileage, keep a contemporaneous log with date, miles, purpose, and destination.
- Use a single annual spreadsheet or a dedicated folder (digital scans accepted) so you can produce documentation quickly if needed.
- Track reimbursements separately and never include reimbursed amounts when calculating your deduction.
- If you receive a lump‑sum or retroactive insurance payment (for example, COBRA reimbursements or settlement proceeds), be careful about the tax year with which those repayments are associated—timing can change which year you can deduct.
If you want a step‑by‑step template for documenting expenses, see our post How to Track Medical Expenses to Maximize Deductions (https://finhelp.io/glossary/how-to-track-medical-expenses-to-maximize-deductions/).
Planning strategies
- Bunching: If you’re close to the AGI floor in multiple years, consider timing elective but necessary medical procedures into one calendar year to push total medical costs over the threshold.
- Coordinate HSA use: If you have an HSA, use it strategically. Paying qualified expenses with an HSA gives tax‑free treatment. If you prefer to preserve HSA balances, you can pay out‑of‑pocket and reimburse yourself later (keeping receipts) to time deductions and cash flow.
- Compare to the standard deduction: Always run the numbers. For many taxpayers—especially after the higher standard deduction under recent tax law—itemizing won’t be beneficial even with significant medical bills.
- Negotiate medical bills: Reducing out‑of‑pocket costs through negotiation or financial assistance improves your net finances even if it reduces the amount you might deduct.
For more on coordinating tax‑favored accounts and Medicare and retirement coordination, see Strategic Use of HSAs and Medicare Coordination at FinHelp (https://finhelp.io/glossary/strategic-use-of-hsas-and-medicare-coordination/).
Common mistakes and audit red flags
- Including reimbursed expenses or insurance payments as deductible amounts.
- Failing to document mileage or dates of service.
- Claiming non‑prescription items without a supporting prescription.
- Overstating the medical necessity of cosmetic procedures. Keep supporting medical records and physician statements when medical necessity is the basis for a deduction.
Frequently asked questions
Q: Can I deduct health insurance premiums I pay myself?
A: Possibly. If you itemize, you can include premiums as a medical expense; self‑employed taxpayers may also qualify to deduct premiums “above the line” on Form 1040 subject to specific rules. Employer‑paid or pre‑tax premiums are generally excluded from deductible expenses.
Q: Can I deduct travel when I go to another city for treatment?
A: Yes, under certain conditions. Travel, lodging (with limits), and transportation costs for essential medical care can qualify. Keep detailed records and follow the IRS rules in Publication 502.
Q: Can I claim medical expenses for my adult child?
A: You can include expenses for a qualifying dependent. Even if you don’t claim someone as a dependent, other rules (support tests) may allow you to deduct their medical expenses—check Pub 502 and IRS dependency tests.
Sources and further reading
- IRS Publication 502, Medical and Dental Expenses (https://www.irs.gov/publications/p502)
- IRS Tax Topic 502 — Medical and Dental Expenses (https://www.irs.gov/taxtopics/tc502)
Professional disclaimer
This article is educational and does not constitute tax, legal, or financial advice. Tax rules change and facts matter: consult a qualified tax professional about your specific situation before relying on these statements.
Author: CFP® practitioner and financial editor.
Updated: 2025. Content draws on IRS Publication 502 and internal FinHelp guidance.
