Are Medical Costs Deductible?

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Medical expenses can quickly add up, especially if you face unexpected health issues, chronic conditions, or major procedures. The IRS allows taxpayers to deduct qualifying medical expenses that exceed a certain percentage of their adjusted gross income. Understanding which medical costs are deductible, how the threshold works, and what documentation you need can help you reduce your tax burden during expensive healthcare years.

Who Can Deduct Medical Expenses?

Any taxpayer who itemizes deductions on Schedule A can potentially deduct medical expenses. This includes individuals, married couples filing jointly, heads of household, and qualifying widow(er)s.

To benefit from medical expense deductions, your total itemized deductions must exceed the standard deduction for your filing status. For 2025, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. If your itemized deductions (including medical expenses, state taxes, mortgage interest, and charitable contributions) don’t exceed these amounts, you’re better off taking the standard deduction.

You can deduct medical expenses paid for yourself, your spouse, and your dependents. This includes children, elderly parents you support, and other qualifying dependents claimed on your tax return.

The 7.5% AGI Threshold

You can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). This threshold means you must have significant medical costs before receiving any tax benefit.

For example, if your AGI is $60,000, you can only deduct medical expenses exceeding $4,500 (7.5% of $60,000). If you have $7,000 in qualifying medical expenses, you can deduct $2,500 ($7,000 minus $4,500).

If your medical expenses don’t exceed this 7.5% threshold, you receive no deduction. This makes the medical expense deduction most valuable during years with major surgeries, hospitalizations, chronic illness treatment, or other high-cost medical situations.

What Medical Expenses Are Deductible?

The IRS allows deductions for a wide range of medical and dental expenses:

Doctor and hospital services including office visits, specialist consultations, hospital stays, surgeries, diagnostic tests, lab work, X-rays, and emergency room visits are fully deductible.

Prescription medications and insulin are deductible. Over-the-counter medications are generally not deductible unless you have a prescription from your doctor for a specific medical condition.

Medical equipment and supplies such as crutches, wheelchairs, walkers, blood sugar test kits, blood pressure monitors, and other durable medical equipment qualify as deductible expenses.

Vision care expenses including eye exams, prescription eyeglasses, contact lenses and solutions, prescription sunglasses, and laser eye surgery (LASIK) are deductible medical costs.

Mental health treatment including therapy sessions, counseling, psychiatric care, and inpatient mental health facility costs are deductible medical expenses.

Preventive care such as annual physical exams, vaccinations, cancer screenings, and wellness visits qualify as deductible healthcare costs.

Medical insurance premiums may be deductible in certain situations. Self-employed individuals can deduct health insurance premiums above the line (without itemizing), while others may include premiums in itemized medical expenses. Medicare premiums, including Part B and Part D, are deductible medical expenses.

Long-term care expenses for chronically ill individuals, including nursing home care when medical care is the primary reason for confinement, are deductible. Personal or custodial care generally doesn’t qualify unless medically necessary.

Substance abuse treatment including alcohol and drug addiction treatment programs, inpatient rehabilitation, and counseling services are deductible medical expenses.

Weight loss programs are deductible only when prescribed by a doctor to treat a specific disease diagnosed by a physician, such as obesity, hypertension, or heart disease. General weight loss for appearance or wellness is not deductible.

Smoking cessation programs and prescription drugs to help quit smoking are deductible medical expenses. This includes nicotine patches, gum, or other cessation aids when prescribed.

What Medical Expenses Are NOT Deductible?

Certain health-related expenses do not qualify for medical deductions:

Cosmetic procedures performed purely for appearance improvement are not deductible. This includes elective plastic surgery, teeth whitening, hair transplants, and similar procedures. However, reconstructive surgery following an accident, disease, or congenital abnormality is deductible.

General health items like vitamins, supplements, health club memberships, gym fees, and fitness equipment are not deductible even if they improve your health. Exceptions exist when these items are specifically prescribed to treat a diagnosed medical condition.

Over-the-counter medications without a prescription are not deductible, except for insulin. Common OTC drugs like pain relievers, cold medicine, and allergy medications don’t qualify unless you have a doctor’s prescription.

Health insurance premiums paid with pre-tax dollars through employer plans cannot be deducted again—you’ve already received the tax benefit. Only premiums paid with after-tax money are deductible.

Funeral and burial expenses are not considered medical expenses and are not deductible.

Medical expenses reimbursed by insurance cannot be deducted. You can only deduct your out-of-pocket costs after insurance reimbursement. If you receive reimbursement in a later tax year, you may need to include that reimbursement as income if you deducted the expense previously.

How to Calculate Your Medical Expense Deduction

Follow these steps to determine your deductible medical expenses:

Step 1: Add up all qualifying medical expenses you paid during the tax year, including amounts paid for yourself, your spouse, and dependents.

Step 2: Subtract any reimbursements you received from insurance or other sources. You can only deduct unreimbursed, out-of-pocket costs.

Step 3: Calculate 7.5% of your adjusted gross income (AGI). You’ll find your AGI on your tax return.

Step 4: Subtract the 7.5% threshold from your total medical expenses. The result is your deductible medical expense amount.

Step 5: Add your medical expense deduction to your other itemized deductions. If your total itemized deductions exceed the standard deduction, itemize to receive the tax benefit.

Medical Expenses for Dependents

You can deduct medical expenses you paid for your dependents, even if they don’t live with you, as long as they meet the IRS definition of a dependent.

For children of divorced parents, the parent who pays the medical expenses can deduct them, even if the other parent claims the child as a dependent. This allows both parents to benefit from medical expense deductions when they each pay different healthcare costs.

If you provide more than half the support for an elderly parent or relative who would qualify as your dependent except for income limitations, you may still deduct medical expenses you paid on their behalf under the multiple support agreement rules.

Timing: When to Deduct Medical Expenses

You deduct medical expenses in the year you actually pay them, regardless of when the services were provided. If you receive medical treatment in December 2025 but pay the bill in January 2026, you deduct the expense in 2026.

Credit card payments count as paid when you charge them, not when you pay off the credit card balance. If you charge $3,000 in medical bills in December 2025, you deduct those expenses in 2025 even if you don’t pay the credit card bill until 2026.

This timing rule creates planning opportunities. If you’re close to the 7.5% threshold late in the year, consider prepaying upcoming medical expenses before year-end to bunch deductions into one year and exceed the threshold.

Medical Savings Accounts and FSAs

Money you contribute to Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) is already tax-advantaged. HSA contributions are tax-deductible (or made with pre-tax dollars), and withdrawals for qualified medical expenses are tax-free.

You cannot double-dip by deducting medical expenses paid with HSA or FSA funds. Only out-of-pocket expenses paid with after-tax money qualify for the itemized medical expense deduction.

However, if your medical expenses exceed your HSA/FSA balances and you pay additional costs out-of-pocket, those additional expenses can be included in your itemized medical deduction calculation.

Documentation Requirements

The IRS requires thorough documentation for medical expense deductions:

Receipts and invoices from doctors, hospitals, pharmacies, and other medical providers showing the date of service, description of services or items, and amount paid.

Insurance statements showing what portion of expenses was covered by insurance and what remained as your responsibility.

Mileage logs if you’re deducting medical travel expenses (covered in a separate article).

Proof of payment including canceled checks, credit card statements, or bank records showing you actually paid the expenses.

Prescription documentation for medications and items that require a doctor’s prescription to qualify as deductible.

Keep all medical receipts and documentation for at least three years after filing your tax return, as the IRS can audit returns during this period.

Common Mistakes to Avoid

Don’t deduct medical expenses that were reimbursed by insurance. You can only deduct your actual out-of-pocket costs.

Don’t forget about the 7.5% AGI threshold. Many taxpayers mistakenly think all medical expenses are deductible, but only amounts exceeding the threshold provide a tax benefit.

Make sure your total itemized deductions exceed the standard deduction. If they don’t, you’re better off taking the standard deduction and receive no benefit from tracking medical expenses.

Don’t deduct cosmetic procedures or general wellness expenses that don’t treat specific medical conditions. These won’t hold up under IRS scrutiny.

Keep detailed records and receipts. Memory-based estimates or generic credit card statements without supporting documentation are insufficient for IRS requirements.

State Tax Considerations

Some states offer more generous medical expense deductions than the federal government. Your state may have a lower AGI threshold or allow deductions for expenses that aren’t federally deductible.

Check your state’s tax rules to see if you can benefit from medical expense deductions at the state level even if you don’t exceed the federal threshold.

Bottom Line

Medical expenses are tax deductible when they exceed 7.5% of your adjusted gross income and you itemize deductions. Qualifying expenses include doctor visits, hospital care, prescriptions, medical equipment, vision care, mental health treatment, and many other healthcare costs. Track all medical expenses throughout the year, subtract insurance reimbursements, calculate whether you exceed the 7.5% threshold, and maintain detailed documentation. Medical expense deductions provide the most benefit during high-cost medical years when expenses significantly exceed the AGI threshold. For personalized guidance on maximizing your medical expense deductions, consult with a qualified tax professional.