If you recently spent thousands on hospital bills or physical therapy, you may be wondering if you qualify for any deductions.
While you can receive a tax deduction for medical expenses in some cases, that’s not always true. It’s important to understand which medical expenses are tax deductible and which aren’t so you’re not incorrectly claiming expenses on your tax return.
Fortunately, we’re here to help you understand medical expense tax deductions and how they can help you reduce your taxable income. In this guide, we’ll cover which types of expenses can be claimed, how the medical expense deduction works, and more, so when it comes time to file, you’re ready.
Table of Contents
Are medical expenses tax deductible?What medical expenses tax deductions can I claim?What medical expenses are not deductible?Can I deduct medical expenses for others on my taxes?How much of my medical expenses can I deduct?Do medical expense tax deductions only apply to costs incurred this year?What documentation do I need for medical expense tax deductions?Is claiming medical expense tax deductions worthwhile?See if you can reduce taxable income with medical expense deductions
Are medical expenses tax deductible?
The short answer is yes, but there are a lot of factors to take into consideration, like when the expenses were paid for, what types of bills they were, and more. But don’t stress; we’re going to break it down for you.
What medical expenses tax deductions can I claim?
The IRS determines which medical and dental expenses qualify for tax deductions, and you’ll be excited to find that it’s actually a fairly expansive list. Here are just some commonly claimed medical expenses:
Medications and aids
If you have to pay for prescription medications, you can deduct those costs from your taxable income. You can also deduct costs for insulin. Aids like eyeglasses, contacts, hearing aids, crutches, and guide dog or service animal expenses qualify as well.
Practitioner fees
This also applies to any fees you may pay to your:
- Doctor, dentist
- Surgeon
- Chiropractor
- Psychiatrist
- Psychologist
- Nontraditional medical practitioners — including acupuncturists
Insurance premiums
You can also receive a tax deduction for monthly payments for insurance that covers qualified long-term care or medical care. Nursing home costs are even tax deductible if your primary reason for being in the nursing home is the availability of medical care.
Weight loss and nutrition programs
Certain programs may be eligible, including weight loss programs that are designed to treat a specific disease like obesity or diabetes. These conditions must be diagnosed by a physician in order to qualify as a medical expense for tax purposes. Similarly, some nutrition expenses may be eligible.
Conferences
If you, your spouse, or your dependent attends a medical conference pertaining to a chronic illness they have, those expenses — minus lodging and meals — can be claimed as medical tax deductions.
There are even tax deductions for some more uncommon medical expenses. See the full list for more deductible medical and dental expenses that pertain to your specific situation.
What medical expenses are not deductible?
While a lot of costs, even those that may surprise you, can be claimed, there are some non-deductible medical expenses that you’ll want to take note of.
One of the biggest cumulative expenses you might have for medical costs is insurance. However, if your employer covers part of your monthly insurance premium, that portion of your premium isn’t eligible for tax write-offs. If they cover all of it, you can’t include it at all. Only the portion of your premium that you paid is considered deductible. For example, employer-sponsored premiums paid under a premium conversion plan, cafeteria plan, or any other medical and dental expenses paid by the plan aren’t deductible unless the premiums are included in box 1 of your Form W2.
Some examples of other medical expenses that aren’t eligible for tax deductions include:
- Funeral and burial expenses
- Non-prescription medicine costs
- Cosmetic surgery costs
In addition to non-prescription medications, the IRS also excludes nicotine gum and nicotine patches if they’re not prescribed to you.
Minor medical expenses, such as daily-use supplies, are also not deductible. For example, you can’t include items like:
- Toothpaste
- Toiletries
- Cosmetics
If you’re paying for a trip or program to improve your general health, that’s also not tax deductible.
Can I deduct medical expenses for others on my taxes?
As a general rule, you can deduct your medical expenses as well as any dependents’ medical expenses you paid for. This includes your spouse.
Spouse
In order to deduct your spouse’s medical expenses, you must have been married at the time medical services were provided to your spouse or paid for. If your spouse received treatment before your marriage, you can’t claim those expenses on your tax return.
Dependents
The same basic rule applies to dependents. If the person who received medical services was your dependent when they received services, or you paid for those services, you could deduct them from your tax return.
Dependents must be a:
- Qualifying child or qualifying relative
- US citizen or national or a resident of the US, Mexico, or Canada.
There is an adopted child exception for medical expense tax deductions. If your child was a member of your household and you’re a US citizen, your child doesn’t have to be a US citizen or a resident of Mexico, the US, or Canada.
How much of my medical expenses can I deduct?
While you can deduct some of your medical expenses to reduce your taxable income, there are rules to keep in mind.
Whether you’re deducting your health insurance premiums or expensive hospital bills, you can deduct any medical expenses that exceed 7.5% of your adjusted gross income (AGI). This means that you can’t deduct any medical expenses if your total medical expenses don’t exceed 7.5% of your AGI.
To calculate your AGI:
- Combine your total income from wages and other sources of income.
- Subtract student loan payments, health savings account (HSA) contributions, and retirement contributions.
This is the number you’ll use to determine whether you can deduct your medical expenses. So, for example, let’s say your AGI is $60,000. You’ll need to multiply $60,000 by 7.5%
$60,000 x 0.075 = $4,500
If your total tax-deductible medical expenses exceed 7.5% of your AGI, you can claim these medical expenses on your tax return and reduce your taxable income. Using the example above, you can only deduct the portion of your expenses that exceeds $4,500.
If your total qualifying medical expenses for the year was $6,500, then you’d be able to claim $2,000.
$6,500 – $4,500 = $2,000
Do medical expense tax deductions only apply to costs incurred this year?
Generally speaking, you can only deduct medical expenses in the year that they were paid rather than incurred. If you received treatment in October and paid in January, you can write off those medical expenses for the new tax year.
It’s also important to mention that you typically can’t receive tax deductions for payments you’ve made on medical services you haven’t received yet. If you made a payment for dental services that you’re not receiving until the following year, you’ll have to wait an additional year to write off those expenses on your tax return.
You also can’t include any expenses that were paid by your insurance provider or a third party.
What documentation do I need for medical expense tax deductions?
If you’re planning on claiming medical expenses on your tax return, you need to prepare ahead of time to make sure you have all the required documentation. Essentially, you need to maintain proof of payments you paid for these medical expenses and assure you are eligible to deduct them from your taxable income.
When you receive any type of medical treatment, make sure you get a receipt for your payment. This also applies to prescription medication and dental care you pay out of pocket for. Since you can only write off medical expenses you’ve paid during that tax year, paying your bills and keeping receipts is essential.
If you have to travel for medical services, keep records of your mileage so you can write it off based on the mileage rate. Not only are public transportation and ambulance rides tax deductible, but you can also receive tax deductions for the money you spend on gas. When you drive to an appointment, pick up a prescription, or make an emergency visit to the hospital, you can deduct those expenses.
Is claiming medical expense tax deductions worthwhile?
That depends on whether you’re planning to claim the standard or itemized deduction.
The standard deduction is often better suited for people with a single source of income and minimal tax deductions. The standard deduction for the 2023 tax year is $13,850 for a single taxpayer. If you’re eligible for tax deductions that exceed the standard deduction, it’s usually better to take the itemized deduction instead of the standard deduction.
If you’re going with itemized because you have a lot of other expenses you can claim, it’s likely worth it to add up your medical expenses. Sure, including medical expenses on your tax return involves a bit of extra record-keeping, but if you have a lot of medical-related costs throughout the year, it can help you save on your taxes.
Your decision also depends on the types of medical expenses you incur. While many types of medical expenses are tax deductible, if the majority of your expenses fall into the non-deductible category, they likely won’t exceed the 7.5% requirement anyway.
See if you can reduce taxable income with medical expense deductions
If you have significant medical expenses that you paid in the last tax year, you may be able to deduct them from your taxable income. However, it’s important to keep in mind that only certain medical expenses are ineligible, and your total medical expenses must exceed 7.5% of your AGI if you’re claiming medical expenses on your taxes.
Keeping records and filing an itemized return can be overwhelming, but it may also significantly reduce your taxable income. You can also work with a tax expert to figure out what medical expenses are tax deductible and claim them on your tax return.
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