Medical Expenses Deduction
If you've had a rough year health-wise, this deduction might ease the financial sting—here's what counts.
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What's the Medical Expenses Deduction?
Had major surgery this year? Dealing with a chronic condition? Those out-of-pocket medical bills might actually reduce your taxes. The Medical Expenses Deduction lets you write off qualifying healthcare costs—but there's a catch.
You can only deduct expenses that exceed 7.5% of your income (called your Adjusted Gross Income, or AGI). That's a pretty high bar. Plus, you need to itemize instead of taking the standard deduction.
Translation? This deduction really only helps people who had major medical events or ongoing expensive treatments. But if you did? It could save you hundreds, even thousands, on your tax bill.
The Quick Summary
- 7.5% threshold: Only expenses above 7.5% of your AGI count
- Itemization required: Must beat the standard deduction to make it worth it
- Out-of-pocket only: Skip anything insurance covered or paid from your FSA/HSA
The 7.5% Threshold (How the Math Works)
Ready to crunch the numbers? Here's a quick example to show how this threshold plays out.
The 7.5% rule means you can't deduct all your medical expenses—only the amount that exceeds 7.5% of your Adjusted Gross Income. Think of it as a hurdle you need to clear before the deduction kicks in.
Example: How It Calculates
The breakdown: You had $15,000 in expenses, but $7,500 (7.5% of your $100K income) doesn't count. So you can deduct $7,500. In the 24% bracket? That saves you about $1,800 in taxes.
Why It's Hard to Qualify
That 7.5% threshold is steep. If you earn $80,000, you need over $6,000 in medical expenses before you can deduct anything. Most people with good insurance don't hit that. But if you had a major surgery, chronic illness care, or something significant? This deduction suddenly becomes very real.
What Counts as "Qualified"?
The IRS has a surprisingly long list of what qualifies. Let's explore.
These Don't Qualify
✗Over-the-counter meds (unless prescribed)
✗Cosmetic procedures (Botox, liposuction)
✗Gym memberships (even if "for health"—unless doc prescribed)
✗Supplements (unless prescribed)
✗Life insurance premiums
✗Insurance reimbursements (can't double-dip)
Thinking that gym membership counts because it's "good for health"? Unfortunately, no—unless your doctor prescribes it for a specific medical condition and you have documentation. General wellness doesn't cut it.
Real-World Example: Linda's Surgery Year
Linda is 52, earns $90,000 as a project manager, and had hip replacement surgery in 2024. Between the surgery, physical therapy, and various medical appointments, her out-of-pocket costs added up fast. Here's how the deduction worked for her:
Linda's Medical Year
Her Expenses
• Hip surgery (after insurance): $8,500
• Physical therapy (12 weeks): $2,400
• Prescription pain meds: $600
• Medical imaging (MRIs, X-rays): $1,200
• Doctor visits & follow-ups: $1,300
• Mileage to appointments (200 mi): $40
Total Medical Expenses: $14,040
The Deduction Math
Linda's AGI:$90,000
7.5% threshold:$6,750
Total expenses:$14,040
Deductible amount:$7,290
Tax savings (24% bracket):~$1,750
The Bottom Line
Linda's medical expenses were brutal, but the deduction softened the blow. By itemizing (she also had mortgage interest and charitable donations), she saved nearly $1,750 in taxes. It didn't erase the costs, but it helped—and that's what this deduction is for.
How to Claim It
Here's your action plan for claiming this deduction.
Save Every Receipt
Start hoarding medical receipts from January 1. Doctor visits, prescriptions, hospital bills, dental work—all of it. Digital copies work great (scan or photo them). Create a folder and dump everything there throughout the year.
Pro tip: Also save your insurance Explanation of Benefits (EOB) statements—they show what you paid out-of-pocket vs what insurance covered.
Calculate the 7.5% Threshold
Take your AGI (from your Form 1040) and multiply by 0.075. That's your threshold. Anything above that number is deductible. Most tax software does this math automatically when you enter your expenses.
File Schedule A
Complete Schedule A (Itemized Deductions) with your Form 1040. Enter your medical expenses on line 1. Keep your receipts for at least three years in case the IRS comes knocking.
Is It Worth It for You?
Let's be real: most people won't benefit from this deduction. But if you fall into these categories, it's worth exploring.
You Should Definitely Check If...
•Major surgery or hospitalization: Those bills add up fast—often exceeding the threshold.
•Chronic conditions: Ongoing treatments, specialists, medications—they compound year over year.
•Fertility treatments or major dental work: These can easily hit $10K-$20K out-of-pocket.
•High health insurance premiums: If you're self-employed or paying premiums with after-tax money, they add up.
Probably Skip It If...
•Good insurance coverage: If insurance covers most things, you won't hit the 7.5% threshold.
•Standard deduction is higher: Even if you qualify, itemizing needs to beat $14,600 (single) or $29,200 (married) to make sense.
•Have an HSA or FSA: Those accounts already give you tax-free medical spending—can't double-dip.