5 Medical Expenses You Can Deduct on Your Taxes

Taxpayers can deduct medical expenses by itemizing them on their taxes. However, these deductions may be out of your reach as the current standard deduction is high. In 2024, the standard deduction is $14,600 for individuals and $29,200 for joint filers. Therefore, taxpayers generally itemize deductions if the total amount is greater than the standard deduction. If you itemize deductions, and you have unreimbursed expenses for necessary medical or dental care, you may be able to claim a tax deduction if they exceed 7.5% of your adjusted gross income. Here are five expenses you may be able to deduct.

A financial advisor can help you optimize your financial plan to lower your tax liability.

Can You Deduct Medical Expenses?

Medical expenses can indeed be deductible on your federal income tax return, but specific requirements must be met. To deduct medical expenses, you must itemize deductions on Schedule A rather than taking the standard deduction. Since the Tax Cuts and Jobs Act increased standard deduction amounts significantly, fewer taxpayers find itemizing advantageous. However, those with substantial medical costs may still benefit from itemizing, especially if combined with other deductible expenses like mortgage interest or charitable contributions.

If your medical expenses don’t qualify for a deduction, consider other tax-advantaged health accounts. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) allow you to pay for medical expenses with pre-tax dollars, potentially offering greater tax benefits than the medical expense deduction for many taxpayers.

When Can You Deduct Medical Expenses?

In some cases, the IRS allows you to deduct medical costs, including dental expenses, from your taxes. In general, the following rules apply to any deduction you want to claim:

You must itemize your taxes, not take the standard deduction
The spending must have been on treatment for you, your spouse or your dependents
You can only deduct spending to the extent that the expenses exceed 7.5% of your AGI
The spending must have been unreimbursed by insurance or any other program
You must have spent the money yourself
In most cases, the treatment must be necessary rather than optional or cosmetic

The personal spending requirement means that you cannot claim a deduction for payments made on your behalf. And the deduction only applies to spending above the cap. For example, say that you make $100,000 in taxable income and have $10,000 in combined medical expenses. You cannot deduct the first $7,500 (7.5% * $100,000), but you can deduct the remaining $2,500 in spending.

Proper record-keeping is essential when deducting medical expenses. Save all receipts, explanation of benefits statements, and payment confirmations. The IRS may request verification of your medical expenses during an audit, so maintaining organized documentation is crucial for substantiating your deduction claims.

What Medical Expenses Are Tax-Deductible?

Households with very significant medical bills may get more value from itemized medical deductions than the standard deduction. If you would like to check whether you can deduct your medical expenses, the IRS offers an interactive assistant. Here are five medical expenses that the agency allows to be deducted:

1. Health Insurance Premiums

Qualifying taxpayers can deduct the monthly premiums that they pay for insurance coverage. These include expenses to HMOs, long-term care insurance and Medicaid payments. Not all insurance will qualify for this tax deduction, so make sure that your coverage does. It also applies to dental insurance, which can often be more expensive than medical coverage.

2. Dental Treatment

Even when you have dental insurance, it frequently doesn’t offer the same kind of comprehensive coverage as medical insurance. Often, dental insurance simply reduces or restructures how you pay for treatment. As a result, even among individuals with insurance, it’s common to pay significant out-of-pocket expenses for dental treatment.

This spending is tax-deductible if you meet the general rules for medical deductions. That can include spending on cleanings, X-rays, fillings, braces and other treatments, but not for cosmetic processes like teeth whitening.

3. Medical Treatment Fees

Whether you see a private practitioner, a psychologist, a chiropractor, a surgeon, a specialist, or other form of medical practitioner, you can take a qualified deduction for treatment fees.

This deduction also can apply to nontraditional practitioners such as acupuncturists. It applies more broadly as well to treatment at rehabilitation centers, weight loss programs and cessation treatment for drugs, alcohol and smoking.

Finally, you can deduct the fees you pay for treatment at medical facilities. For example, a qualifying taxpayer can deduct their expenses for hospital care or a stay in a nursing home. This deduction can include all of your costs of care, not just direct medical treatment. For example, you can deduct the costs of food and lodging during a hospital stay.

4. Prescription Drugs

After treatment, a patient may need to pay out of pocket for insulin and other prescription drugs. So long as you meet the qualifications and the drugs are considered necessary rather than cosmetic or otherwise optional, this spending is tax-deductible.

As with dental treatment, this is a common source of significant expenses since insurance often will not fully cover drug costs.

5. Medical Aids and Devices

Medical devices are in a broad category, and you can deduct qualified spending within it. While medical devices generally apply to urgent care, such as pacemakers and oxygen tanks, it can also refer to much more common spending as well.

For example, you can deduct expenses for eyeglasses, contact lenses, hearing aids, crutches, wheelchairs and service animals. For most households, if you itemize your taxes, there’s a good chance that you will have some medical device spending to claim.

Bottom Line

An individual taxpayer reviewing which medical expenses he could claim as a tax deduction.

Understanding which medical expenses you can deduct on your taxes can lead to significant savings come tax season. Remember that you can only deduct medical expenses that exceed 7.5% of your adjusted gross income, but many qualifying expenses might surprise you. From obvious costs like doctor visits and prescription medications to less apparent deductions like travel expenses for medical care and home modifications for health conditions, the IRS allows numerous health-related write-offs.

Medical Savings Tips

Health care spending particularly surges in retirement, as declining health often leads to more medical needs. This guide can help you plan for those costs in retirement.
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