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If you, your spouse or your kids have had expensive medical or dental bills this year, you could cut your tax bill with the medical expense deduction. Read on to see if you qualify and how much you could claim on your tax return.
The medical expense deduction is a federal tax deduction used to offset the costs of high medical bills. But you must itemize to claim it and your qualified medical expenses must exceed 7.5% of your adjusted gross income.
For example, let’s say your gross income is $80,000, but you contributed $19,000 to your 401(k), sent $12,000 in alimony to your ex-spouse and paid $2,000 in student loan interest. Your adjusted gross income (AGI) would be $47,000 and you could claim any unreimbursed medical expenses exceeding $3,525. So, if your medical expenses topped out at $8,000, you could deduct $4,475 from your taxes.
The chart below outlines popular medical expenses you can and can’t deduct. Visit the IRS website for a complete list.
| Medical expense | Deductible |
|---|---|
| Ambulance | |
| Breast reconstruction surgery after mastectomy | |
| Cosmetic procedures | |
| Dental treatments | |
| Eyeglasses | |
| Future medical care | |
| Guide dog or service animal | |
| Health club dues | |
| Home care | |
| Maternity clothes | |
| Medical expenses paid in a different tax year | |
| Medicines from other countries | |
| Nonprescription drugs, excluding insulin | |
| Personal use items like toothpaste and deodorant | |
| Psychologist | |
| Surgery | |
| Teeth whitening | |
| Transportation costs for medical care | |
| Vitamins and supplements | |
| Wheelchair | |
| Wigs for patients who have lost their hair due to illness |
Deduct all unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
A law passed in December 2019 that preserved the medical expense deduction at 7.5% for tax years starting in 2019. If you used Form W-4 to calculate your medical expense deduction before December 31, 2019, the IRS recommends redownloading Form W-4 and using the new revision that lists the 7.5% amount.
The medical expense deduction has these limitations:
The medical expense deduction has fluctuated between 10% and 7.5% in previous years. Between 2013 and 2016, the threshold was 10% for most taxpayers or 7.5% for anyone over age 65. In 2017 and 2018, the medical deduction floor was dropped, and you could only deduct unreimbursed medical expenses that exceeded 7.5% of your AGI.
Most notably, while it was scheduled to go back up to 10% for tax year 2019, federal law kept the percentage at 7.5% for tax years 2019 and 2020.
You’re eligible to claim this deduction as long as your medical expenses exceed 7.5% of your AGI.
Follow these four steps to calculate your medical expense deduction or to see if you qualify:
For example, if your AGI is $40,000, then any medical expense over the $3,000 limit qualifies for the medical expense deduction. So, if your out-of-pocket medical expenses were $5,000, you could write off $2,000. But if your medical expenses were $3,000 or less, you wouldn’t qualify.
The medical expense deduction has these potential drawbacks:
Taxpayers who qualify for the medical expense deduction may also qualify for the:
If you or your family have racked up major medical or dental bills this year, you could offset some of the costs with the medical expense deduction. But your unreimbursed expenses must exceed 7.5% of your AGI to qualify, and you’ll have to itemize your taxes.
If you’re unsure about which medical expenses qualify, consider hiring a tax professional or using a top-rated online service that can help you figure it out. These services also calculate whether you’ll save more money by going with the standard or itemized deduction.
What form do I use to claim the medical expense deduction?
Use Schedule A to claim all your itemized deductions, including the medical expense deduction.
When is my health insurance premium tax deductible?
If you paid for your health insurance premiums with after-tax dollars, then they’re a qualified medical expense. However, you can only claim them if your total out-of-pocket costs exceed 7.5% of your AGI.
Where can I find my adjusted gross income?
Your AGI is listed on line 7 of Form 1040.
Or, calculate it from your W2 by taking your gross income and subtracting any itemized deductions you qualify for, including:
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