5 Medical Expenses You Can Deduct on Your Taxes

Taxpayers can deduct medical expenses by itemizing them on their taxes. However, these deductions may be out of your reach as the current standard deduction is high. In 2024, the standard deduction is $14,600 for individuals and $29,200 for joint filers. Therefore, taxpayers generally itemize deductions if the total amount is greater than the standard deduction. If you itemize deductions, and you have unreimbursed expenses for necessary medical or dental care, you may be able to claim a tax deduction if they exceed 7.5% of your adjusted gross income. Here are five expenses you may be able to deduct.

A financial advisor can help you optimize your financial plan to lower your tax liability.

Can You Deduct Medical Expenses?

The IRS allows taxpayers to deduct certain unreimbursed medical and dental expenses if they itemize deductions on their federal income tax return. Taxpayers who claim the standard deduction generally cannot also deduct medical expenses. Eligible expenses may include costs incurred for yourself, your spouse and qualifying dependents, provided they were not reimbursed by insurance or another source.

Medical expenses are deductible only to the extent they exceed 7.5% of your adjusted gross income (AGI) for the tax year. For example, if your AGI is $80,000, only qualified medical expenses above $6,000 may be deductible. This threshold means many taxpayers benefit from the deduction only in years with unusually high healthcare costs.

The IRS defines qualified medical expenses as costs primarily incurred to diagnose, treat, prevent or mitigate a physical or mental illness or condition. These may include payments for doctor visits, hospital care, prescription medications, certain medical equipment and other eligible healthcare services. Expenses that are primarily for general health or personal well-being, such as most cosmetic procedures, typically do not qualify.

Claiming a medical expense deduction requires good documentation. Taxpayers should retain receipts, invoices, insurance statements and other records that show the amount paid and confirm the expense was not reimbursed. Maintaining organized records throughout the year can make it easier to calculate eligible deductions and support them if questions arise during the tax filing process.

When Can You Deduct Medical Expenses?

In some cases, the IRS allows you to deduct medical costs, including dental expenses, from your taxes. In general, the following rules apply to any deduction you want to claim:

You must itemize your taxes, not take the standard deduction
The spending must have been on treatment for you, your spouse or your dependents
You can only deduct spending to the extent that the expenses exceed 7.5% of your AGI
The spending must have been unreimbursed by insurance or any other program
You must have spent the money yourself
In most cases, the treatment must be necessary rather than optional or cosmetic

The personal spending requirement means that you cannot claim a deduction for payments made on your behalf. And the deduction only applies to spending above the cap. For example, say that you make $100,000 in taxable income and have $10,000 in combined medical expenses. You cannot deduct the first $7,500 (7.5% * $100,000), but you can deduct the remaining $2,500 in spending.

Proper record-keeping is essential when deducting medical expenses. Save all receipts, explanation of benefits statements, and payment confirmations. The IRS may request verification of your medical expenses during an audit, so maintaining organized documentation is crucial for substantiating your deduction claims.

What Medical Expenses Are Tax-Deductible?

Households with very significant medical bills may get more value from itemized medical deductions than the standard deduction. If you would like to check whether you can deduct your medical expenses, the IRS offers an interactive assistant. Here are five medical expenses that the agency allows to be deducted:

1. Health Insurance Premiums

Qualifying taxpayers can deduct the monthly premiums that they pay for insurance coverage. These include expenses to HMOs, long-term care insurance and Medicaid payments. Not all insurance will qualify for this tax deduction, so make sure that your coverage does. It also applies to dental insurance, which can often be more expensive than medical coverage.

2. Dental Treatment

Even when you have dental insurance, it frequently doesn’t offer the same kind of comprehensive coverage as medical insurance. Often, dental insurance simply reduces or restructures how you pay for treatment. As a result, even among individuals with insurance, it’s common to pay significant out-of-pocket expenses for dental treatment.

This spending is tax-deductible if you meet the general rules for medical deductions. That can include spending on cleanings, X-rays, fillings, braces and other treatments, but not for cosmetic processes like teeth whitening.

3. Medical Treatment Fees

Whether you see a private practitioner, a psychologist, a chiropractor, a surgeon, a specialist, or other form of medical practitioner, you can take a qualified deduction for treatment fees.

This deduction also can apply to nontraditional practitioners such as acupuncturists. It applies more broadly as well to treatment at rehabilitation centers, weight loss programs and cessation treatment for drugs, alcohol and smoking.

Finally, you can deduct the fees you pay for treatment at medical facilities. For example, a qualifying taxpayer can deduct their expenses for hospital care or a stay in a nursing home. This deduction can include all of your costs of care, not just direct medical treatment. For example, you can deduct the costs of food and lodging during a hospital stay.

4. Prescription Drugs

After treatment, a patient may need to pay out of pocket for insulin and other prescription drugs. So long as you meet the qualifications and the drugs are considered necessary rather than cosmetic or otherwise optional, this spending is tax-deductible.

As with dental treatment, this is a common source of significant expenses since insurance often will not fully cover drug costs.

5. Medical Aids and Devices

Medical devices are in a broad category, and you can deduct qualified spending within it. While medical devices generally apply to urgent care, such as pacemakers and oxygen tanks, it can also refer to much more common spending as well.

For example, you can deduct expenses for eyeglasses, contact lenses, hearing aids, crutches, wheelchairs and service animals. For most households, if you itemize your taxes, there’s a good chance that you will have some medical device spending to claim.

How to Take Deductions on Your Taxes

To claim a medical expense deduction, you must itemize deductions on your federal income tax return instead of taking the standard deduction. Medical expenses are reported as part of your itemized deductions, and only the portion that exceeds 7.5% of your adjusted gross income (AGI) is deductible. Comparing your total itemized deductions to the standard deduction can help determine which approach provides the greater tax benefit.

Taxpayers who itemize generally report medical and dental expenses on Schedule A of Form 1040. The worksheet and instructions for Schedule A can help calculate the deductible amount after applying the AGI threshold. Carefully reviewing the IRS instructions can help reduce errors and ensure only eligible expenses are included.

It’s important to keep receipts, invoices, canceled checks, explanation of benefits (EOB) statements and other records that document your medical expenses. These documents can help verify the amount of your deduction if the IRS requests additional information. Maintaining organized records throughout the year can also make tax preparation easier and more accurate.

Bottom Line

An individual taxpayer reviewing which medical expenses he could claim as a tax deduction.

Deducting qualified medical expenses can help reduce your tax bill if you itemize deductions and your unreimbursed healthcare costs exceed the IRS threshold. Understanding which expenses qualify, keeping thorough records and following the proper filing procedures can help you maximize any available tax savings. Because the rules can be complex and individual circumstances vary, consulting a tax professional may be worthwhile if you have significant medical expenses or questions about your eligibility.

Medical Savings Tips

Health care spending particularly surges in retirement, as declining health often leads to more medical needs. This guide can help you plan for those costs in retirement.
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