Can I Deduct Medical Expenses on My Taxes?

Medical expenses can add up quickly, and the good news is that some of these costs may be deductible on your tax return. But there are specific rules you need to follow to take advantage of this deduction.

What Medical Expenses Can You Deduct?

The IRS allows you to deduct certain medical and dental expenses if they exceed 7.5% of your adjusted gross income (AGI). This means you can only deduct the portion of your medical costs that goes beyond this threshold.

Here's an example:

Let’s say your adjusted gross income (AGI) for the year is $100,000.

The IRS allows you to deduct medical and dental expenses if they exceed 7.5% of your AGI.

7.5% of $100,000 = $7,500.

Now, let’s say your total medical and dental expenses for the year are $12,000.

You can only deduct the amount that exceeds $7,500.

$12,000 (total expenses) - $7,500 (7.5% of AGI) = $4,500.

In this example, you would be able to deduct $4,500 of your medical and dental expenses on your tax return.

Here are some common medical expenses you can deduct:

• Doctor visits: Co-pays and out-of-pocket costs for doctor visits, specialists, and mental health professionals.

• Prescriptions: Costs for prescription medications are deductible.

• Dental work: You can deduct expenses for dental visits, treatments, and even dentures.

• Surgeries and hospital stays: The cost of surgeries, hospital stays, and related treatments are deductible.

• Medical equipment: Expenses for necessary medical equipment like wheelchairs, crutches, or hearing aids qualify.

• Insurance premiums: If you pay for medical insurance yourself and it’s not pre-tax through your employer, you can deduct these premiums.

What’s Not Deductible?

Not all medical expenses qualify. Over-the-counter medications, cosmetic procedures (like plastic surgery), and gym memberships (unless prescribed for a specific condition) are generally not deductible.

How to Claim the Deduction

You must itemize your deductions to claim medical expenses. This means you’ll need to list all your deductions on Schedule A of your tax return, instead of taking the standard deduction. If your total itemized deductions (including medical expenses, mortgage interest, property taxes, etc.) are less than the standard deduction, it won’t make sense to itemize.

Summary

• You can deduct medical expenses that exceed 7.5% of your AGI.

• Deductible expenses include doctor visits, prescriptions, surgeries, and medical equipment.

• You’ll need to itemize your deductions to claim this, so make sure your total deductions are higher than the standard deduction.

Before claiming any deductions, it’s a good idea to consult your accountant to ensure you’re maximizing your tax savings.