What Medical Expenses can you Deduct?
Tax-deductible medical expenses on Schedule A (Form 1040) are your total, unreimbursed, qualifying medical and dental costs that exceed 7.5% of your Adjusted Gross Income (AGI). You must itemize deductions to claim these expenses, and they must be primarily for the diagnosis, cure, mitigation, treatment, or prevention of a physical or mental illness.
Deductible Medical Expenses
Qualifying expenses include a wide variety of costs paid for you, your spouse, and your dependents. For a comprehensive list, refer to IRS Publication 502.
Fees for Medical Practitioners: Payments to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and other qualified medical practitioners.
Inpatient Care: Costs for inpatient hospital care, including meals and lodging. Nursing home expenses are also deductible if the main reason for the stay is medical care.
Prescription Medications and Insulin: Costs for medicines or drugs that require a prescription, as well as insulin.
Medical Aids and Equipment: Costs for items such as false teeth, reading or prescription eyeglasses, contact lenses, hearing aids, braces, crutches, wheelchairs, and guide dogs or other service animals.
Transportation: Out-of-pocket expenses for transportation primarily for and essential to medical care, including gas and oil, parking fees, tolls, and ambulance services. You can also use the standard mileage rate for medical expenses.
Insurance Premiums: Premiums paid for medical, dental, and qualified long-term care insurance (subject to limitations for the latter) are deductible. This does not include premiums paid with pre-tax dollars through an employer-sponsored plan (e.g., a cafeteria plan).
Programs and Treatments:
Inpatient treatment at a center for alcohol or drug addiction.
Smoking-cessation programs and prescription drugs for nicotine withdrawal.
Weight-loss programs for a specific disease diagnosed by a physician (e.g., obesity, heart disease).
Home Modifications: The cost of special equipment installed in a home or improvements made primarily for medical reasons, such as ramps or grab bars, provided they do not increase the home's value (or only the part of the cost that exceeds the increase in value).
Non-Deductible Expenses
Expenses that are merely beneficial to general health, or for cosmetic reasons, are generally not deductible. Examples include:
Funeral or burial expenses.
Nonprescription medicines and over-the-counter items (except insulin).
Toiletries, cosmetics, and vitamins.
Health club dues or gym memberships (unless a specific medical necessity diagnosed by a doctor).
Most cosmetic surgery (unless necessary to correct a congenital abnormality, an injury, or a disfiguring disease).
Insurance premiums paid via an employer's pre-tax plan (since they are already excluded from income).
How to Claim the Deduction
Total your expenses: Add up all your qualified, unreimbursed medical and dental expenses for the year.
Fill out Schedule A: Enter your total medical expenses on line 1 of Schedule A (Form 1040).
Apply the AGI limit: You can only deduct the amount of expenses that is more than 7.5% of your Adjusted Gross Income (AGI).
Itemize: You must choose to itemize your deductions (using Schedule A) rather than taking the standard deduction. Use the option (standard or itemized) that results in a lower tax bill.
