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Medical bills can add up quickly. If you have high medical or dental expenses for yourself, your spouse, or a dependent, you may be able to deduct them from your income tax if they meet certain criteria.
Some medical and dental expenses are tax-deductible, and others are not. Fortunately, the IRS’s allowable list is fairly extensive, so it’s feasible to think you can find yourself a nice deduction. As with all deductions, we strongly advise you to retain all invoices and receipts in case you have to prove your claim.
Most practitioner expenses, including chiropractic, acupuncture, and non-traditional medical providers, are tax deductible.
Psychiatrists, psychologists, therapists, and mental health care provider fees are eligible, too.
Inpatient care at a hospital, residential nursing home, or inpatient treatment at a rehab facility for drug or alcohol addiction are also deductible.
Some weight-loss programs are also covered as long as they relate to specific diagnoses, like obesity or diabetes. In some situations, a gym membership might be partially deductible if your doctor recommends membership to control your weight or prevent obesity.
Additionally, you may deduct costs for:
You may also be able to deduct expenses related to attending conferences related to a chronic illness if you or a dependent has that condition. However, this does not include meals and lodging.
The amount you can deduct relates directly to your adjusted gross income (AGI) for the year. You can claim only the amount exceeding 7.5% of your AGI. You can also include your spouse’s and dependents’ medical expenses in that amount.
If your medical and dental expenses do not exceed 7.5% of your AGI, you can’t deduct them.
Calculating your AGI is simple.
Take your gross income from all sources, subtract student loan payments, retirement plan contributions, and health savings account contributions, and you’ve got your number.
For example, if your AGI is $73,000, multiply that by 7.5%. The resulting number, $5,475, is your baseline. You can deduct any amount over $5,475. If your medical expenses were $12,000, you could deduct $6,525.
If you have a significant medical expense during the year, such as if a family member had a serious accident that racked up some bills, this deduction could be a massive help.
For a spouse’s expenses to be deducted on your return, you will have had to be married when the costs were incurred. Similarly, to claim a dependent deduction, they must have been your dependents when the expense was paid.
For adopted children, if they were a member of your household and you’re a US citizen, they don’t have to have citizenship status for you to claim them as dependents.
Taxpayers can deduct most medical and dental expenses not paid by insurance or a health savings account, including health insurance premiums.
Amounts that are not deductible are the portion of your premiums paid by your employer or any amounts paid by your insurance. If your premiums are included in Box 1 of your W-2, you can deduct that amount.
You also cannot deduct trips or vacations for the purpose of improving your overall health.
Typically, expenses are only deductible in the year they were paid. So, if you had a hospital stay in 2024 but paid the bill in 2025, you would claim it on your 2025 return.
Retaining documentation of all medical and dental-related payments is essential if you intend to write them off.
Request an itemized receipt and proof of payment for every service or treatment you receive. This also applies to prescriptions, dental care, massages—anything you are eligible for and intend to deduct.
Travel expenses for medical reasons must be meticulously recorded. Eligible expenses include mileage, public transit fares, taxis, ambulance, and gas. Even driving to the pharmacy to pick up medications or going to emergency can be deducted, so keep a log and file your receipts.
While this might sound like a lot of extra work, it can be very helpful at tax time and may save you a lot of money in the long run.
Individual taxpayers have a standard deduction ($14,600 for 2024), but if your expenses exceed that, the extra work will be worthwhile.
Self-employed individuals can claim a medical deduction but do not have to itemize every expense. Instead of claiming it as an expense, the credit is applied to your taxable income.
You can file an itemized list on Schedule A Form 1040 if your expenses exceed the allowance.
One caveat for the self-employed is that you can’t claim a deduction if it exceeds your yearly income. You must have a positive earned income, and the deduction must be less than that number.
Ultimately, if you have significant medical and dental expenses, they can be a worthwhile deduction. However, if your expenses do not exceed 7.5% of your income, you can’t deduct anything, and you’re better off taking the standard deduction.
Medical deductions can be very helpful if you or a dependent have experienced a significant health issue, and the money you save on your taxes may help get you back on track.
Set up a call with one of our Tax Smart experts today. We’d love to hear about your situation and show you how we can help.
Posted: 02/25/2025
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