I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.See all posts Frank Gogol
Are Medical Expenses Tax Deductible?
Are medical expenses tax deductible? The answer can have a significant impact on your finances. Navigating the complexities of the IRS tax code can be daunting, but with our insights, you’ll understand the ins and outs of medical expenses tax deductions and how to maximize your savings.
Understanding Deductible Medical Expenses
What qualifies as deductible medical expenses? According to the IRS, medical expenses include:
- payments for the diagnosis
- prevention of disease
- treatments affecting any part or function of the body
For a detailed list of deductible expenses, consult IRS Publication 502.
- Example: Diabetic expenses like insulin and testing kits are tax-deductible, offering financial relief to those managing this condition.
Which Medical Expenses Cannot Be Deducted?
Like with education expenses and dental expenses, not all medical expenses are tax deductible. Non-deductible items are typically not directly related to a medical condition, such as gym memberships or diet foods.
Criteria for Deducting Medical Expenses
To qualify for a medical expenses tax deduction, your expenses must exceed 7.5% of your adjusted gross income (AGI). Itemizing deductions on Schedule A (Form 1040) is essential, as outlined in IRS Tax Topic 502.
- Example: With an AGI of $50,000, any medical expense beyond $3,750 could potentially qualify for a deduction.
Methodically Deducting Medical Expenses
The deduction process is methodical. Itemize deductions using Schedule A (Form 1040), ensure your expenses surpass 7.5% of AGI, retain all medical expense receipts, and note that only unreimbursed expenses are deductible.
List of Deductible Medical Expenses
A broad range of medical costs are deductible, from healthcare provider fees to prescribed medications and essential surgeries. They include:
|Medical Expense Category||Description|
|Payments to Doctors, Dentists, Surgeons, and Other Medical Practitioners||Fees paid for the diagnosis, cure, mitigation, treatment, or prevention of disease.|
|Hospital Care and Nursing Home Services||Including the cost of meals and lodging charged by the hospital or nursing home.|
|Acupuncture||Payments for acupuncture treatments.|
|Alcohol and Drug Abuse Treatment||Costs of programs for treatment.|
|Ambulance and Health Care Transportation Costs||Expenses for ambulance services and other healthcare-related transportation.|
|Annual Physical Examinations||Including diagnostic tests administered as part of the examination.|
|Artificial Limbs and Prosthetic Devices||Expenses for artificial limbs, eyes, and related maintenance.|
|Bandages and Related Items||Costs of medical supplies such as bandages.|
|Birth Control Pills||Prescribed by a doctor.|
|Body Scan (CAT Scan, MRI, etc.)||Cost of diagnostic imaging.|
|Braille Books and Magazines||Part of the cost that exceeds the regular printed edition price.|
|Breast Pumps and Lactation Supplies||–|
|Chiropractor||Fees paid for chiropractic care.|
|Christian Science Practitioner||Payments for medical care.|
|Contact Lenses||Including the cost of saline solution and enzyme cleaner.|
|Crutches||Rental or purchase costs.|
|Dental Treatments||Such as X-rays, fillings, braces, extractions, dentures.|
|Dermatologist||Medical care provided by a dermatologist.|
|Diagnostic Devices||Such as blood sugar test kits for diabetics.|
|Drug Addiction Treatment||Including food and lodging provided by a therapeutic center for drug addiction.|
|Eye Exams and Eyeglasses||Cost of eye examinations and prescription glasses.|
|Fertility Enhancement||Including in vitro fertilization or surgery to reverse prior surgery that prevented the person operated on from having children.|
|Guide Dog or Other Service Animal||Costs of buying, training, and maintaining a guide dog or other service animal to assist a visually impaired or hearing-disabled person, or a person with other physical disabilities.|
|Hearing Aids||Cost and maintenance of hearing aids.|
|Home Care Services||Part-time or full-time nursing care.|
|Home Improvements for Medical Care||Such as ramps, grab bars, and modifications for wheelchair accessibility (subject to certain limitations).|
|Insulin and Related Prescriptions||–|
|Laboratory Fees||Associated with medical care.|
|Laser Eye Surgery||Such as LASIK.|
|Lead-Based Paint Removal||Only if the paint is causing a medical condition and other conditions are met.|
|Legal Fees Paid to Authorize Treatment for Mental Illness||–|
|Long-Term Care Services||Subject to certain conditions.|
|Medical Conferences and Seminars||If related to a chronic illness suffered by you, your spouse, or your dependents.|
|Medical Records Charges||Fees for copying and summarizing.|
|Medical Supplies and Equipment||Such as wheelchairs, walkers, and oxygen equipment.|
|Medicines and Drugs||Prescription drugs and insulin.|
|Nursing Services||Including wages and taxes for nursing services.|
|Obstetrical Expenses||Prenatal care and childbirth.|
|Operations||Surgical fees, excluding unnecessary cosmetic surgery.|
|Optometrist||Medical care provided by an optometrist.|
|Organ Transplants||Including donor costs.|
|Orthodontia||Braces and related treatments.|
|Orthopedic Shoes and Inserts||If prescribed by a doctor.|
|Osteopath||Medical care provided by an osteopath.|
|Oxygen and Oxygen Equipment||–|
|Psychologist||Therapeutic care provided by a psychologist.|
|Special Education||Including tuition fees, tutoring, and special supplies for a child with learning disabilities if recommended by a doctor.|
|Surgery||Excluding cosmetic surgery that is not medically necessary.|
|Telephone Equipment for the Hearing Impaired||–|
|Television Equipment||The part of the cost that exceeds the price of a regular item, for equipment that displays the audio part of television programming as subtitles for the hearing impaired.|
|Therapy||For a specific medical condition.|
|Transportation Expenses||Related to medical care, including standard mileage rates or actual expenses for car, bus, taxi, train, or plane fares, and ambulance services.|
|Weight-Loss Programs||For a specific disease diagnosed by a physician, such as obesity, hypertension, or heart disease.|
|Wheelchair||Cost and maintenance.|
|Wig||Purchased upon the advice of a physician because of hair loss due to disease.|
Generally speaking, medical expenses not listed above need to be paid out-of-pocket or with alternative funding sources such as medical loans.
Non-Qualifying Medical Expenses
Expenses for general health or cosmetic purposes are typically not deductible. This includes most cosmetic surgeries (which can be paid for with loans) and non-prescription drugs, barring insulin.
- Example: Cosmetic dental treatments, such as teeth whitening, are not eligible for tax deduction.
Deducting Medical Expenses for Dependents
The medical expenses tax deduction extends to dependents’ medical costs. In some cases, even medical expenses for former spouses can be included if certain conditions are met.
- Example: Deductible expenses can include a dependent’s necessary dental treatments, like orthodontics if they exceed the 7.5% AGI threshold.
The Distinction Between Tax Credits and Deductions
It’s essential to understand the difference between tax credits, which directly reduce your tax liability, and deductions, which lower your taxable income. The Premium Tax Credit is a notable health-related tax credit.
Special Considerations for Seniors and the Disabled
Older adults and people with disabilities might have different kinds of deductions, like for long-term care. Check the HUD guidelines for more about housing costs related to health.