The Break-Even Formula: 7.5% of Your AGI

The IRS medical deduction threshold is 7.5% of your Adjusted Gross Income — every year, for every taxpayer. There’s no fixed dollar amount; it scales with your income. The higher your income, the more you need to spend on medical costs before anything is deductible. The math: multiply your AGI by 0.075 to find your floor. Only out-of-pocket costs above that number generate a deduction.

Here’s what that looks like at common income levels for 2024:

• $40,000 AGI → $3,000 threshold
• $55,000 AGI → $4,125 threshold
• $70,000 AGI → $5,250 threshold
• $90,000 AGI → $6,750 threshold
• $120,000 AGI → $9,000 threshold
• $150,000 AGI → $11,250 threshold

These are the minimums. You need to spend more than these amounts — and the deduction is only the excess above the threshold, not the total.

What Counts as a Qualifying Medical Expense?

The IRS defines qualifying expenses broadly under IRS Publication 502. The categories most people have include doctor visits and co-pays, dental care (cleanings, fillings, crowns, orthodontia), vision (glasses, contacts, LASIK), prescription medications and insulin, mental health therapy (in-person and telehealth), hospital and surgery out-of-pocket costs, and medical mileage at 21 cents per mile.

Things people commonly forget: durable medical equipment like CPAP machines and hearing aids, home modifications required for medical reasons (wheelchair ramps, grab bars), long-term care insurance premiums (age-based limits apply), and health insurance premiums if you’re self-employed or pay them entirely out of pocket.

How to Add Up Your Expenses Correctly

Add up every dollar you paid out of pocket for medical care during the calendar year — January 1 through December 31. Include what you paid toward your insurance deductible, co-pays, any co-insurance, the balance on medical bills, and prescription drug costs. Then subtract two categories: anything your insurance reimbursed, and anything paid from an HSA or FSA. Whatever remains is your qualifying expense total for the 7.5% calculation.

For mileage: multiply your round-trip miles to each medical appointment by 21 cents (the 2024 IRS medical mileage rate). Add parking and tolls as well. For a patient who drives 30 miles round-trip to therapy 50 times a year, that’s $315 in mileage alone — often forgotten, always eligible.

Why Most People Are Closer Than They Think

The most common mistake is stopping too early. People assume they don’t have enough medical expenses without actually adding them all up. By the time you count dental work, new glasses, prescription costs for the whole family, co-pays across multiple providers, and medical mileage, many households are within striking distance of the threshold — or over it — without realizing it.

And if you’re close, the bundling strategy gives you a year-end lever to pull. Scheduling pending procedures in the same tax year — that dental crown, the LASIK consultation, those hearing aids — can push you over the threshold and convert a near-miss into a real deduction worth hundreds or thousands of dollars.

Does the Medical Deduction Actually Help If You Don’t Itemize?

Only if your total itemized deductions exceed the standard deduction. For 2024, that’s $14,600 (single) or $29,200 (married filing jointly). If your medical deduction above the 7.5% floor, plus state and local taxes (capped at $10,000), plus mortgage interest, and charitable contributions don’t add up to more than the standard deduction, you won’t benefit from claiming medical expenses — the standard deduction gives you more. Use our itemized vs. standard deduction calculator to compare.