Medical expenses are one of the most misunderstood itemized deductions, mostly because of the threshold you need to clear before any of it counts. Here’s the complete picture of what qualifies and how the math actually works.
The 7.5% AGI Threshold
You can only deduct the portion of your medical expenses that exceeds 7.5% of your adjusted gross income, and only if you itemize instead of taking the standard deduction. If your AGI is $60,000, for example, the first $4,500 of medical expenses isn’t deductible — only costs above that amount count.
Expenses That Qualify
- Payments to doctors, dentists, surgeons, and other licensed medical practitioners
- Prescription medications and insulin
- Hospital and nursing home care primarily for medical treatment
- Mental health treatment, including therapy and psychiatric care
- Medical equipment like wheelchairs, crutches, and hearing aids
- Transportation costs primarily for and essential to medical care, including mileage to appointments
- Long-term care insurance premiums, up to age-based limits
- Health insurance premiums you pay yourself, if not already pre-tax through payroll or deducted elsewhere
Expenses That Generally Don’t Qualify
- Cosmetic procedures that aren’t medically necessary
- General health items like vitamins and toiletries, unless specifically prescribed to treat a diagnosed condition
- Gym memberships, unless prescribed by a doctor to treat a specific medical condition
- Expenses reimbursed by insurance or paid through an FSA or HSA (since those are already tax-advantaged)
Whose Expenses You Can Include
You can generally include medical expenses you paid for yourself, your spouse, and anyone who qualifies as your dependent, even if that dependent doesn’t otherwise need to file their own return.
Frequently Asked Questions
Can I deduct medical expenses if I take the standard deduction? No — the medical expense deduction only applies if you itemize on Schedule A. If your total itemized deductions, including medical expenses above the threshold, don’t exceed your standard deduction, itemizing won’t help.
Do I need receipts for every expense? Yes, keep receipts, EOBs (explanation of benefits), and mileage logs for medical travel in case the IRS asks you to substantiate what you claimed.
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