Are Contact Lenses a Tax Deductible Medical Expense?

The cost of contact lenses is considered a valid medical expense by the Internal Revenue Service (IRS), but specific rules and limitations apply. To benefit from this deduction, you must confirm your expenses qualify, choose to itemize your deductions, and meet an income-based threshold.

Defining Contact Lenses as a Medical Expense

The IRS allows taxpayers to deduct expenses paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. Within this framework, costs associated with vision correction are included. This means prescription contact lenses, which are intended to correct a physical defect or illness, are considered a qualifying medical expense.

Amounts paid for necessary supplies, such as saline solution and cleaning products, are also deductible. The professional services required to obtain your prescription, like the eye examination fee, also fall under deductible medical care. Non-prescription colored contacts or special-effect lenses that do not correct vision are not considered medical care and cannot be included in your medical expense total.

The Standard Deduction vs Itemizing

Every taxpayer has the choice between taking the standard deduction or itemizing their deductions. You can only claim medical expenses if you choose to itemize, which involves listing your individual deductible expenses on Schedule A (Form 1040).

The standard deduction is a fixed dollar amount that you can subtract from your income, and the amount varies based on your filing status, age, and other factors. The choice to itemize makes financial sense only when the total of all your itemizable expenses exceeds the standard deduction amount for the tax year. These other deductions can include payments for state and local taxes, home mortgage interest, and charitable contributions.

Calculating the Deduction with the AGI Limit

Even if you itemize, you cannot deduct the full cost of your medical expenses. The IRS imposes a limitation based on your Adjusted Gross Income (AGI). You can only deduct the portion of your total medical expenses that exceeds 7.5% of your AGI. This threshold applies to your combined medical costs for the year, not just your vision-related spending.

To illustrate, consider a taxpayer with an AGI of $60,000. The 7.5% threshold would be $4,500 ($60,000 x 0.075). If this individual incurred $5,500 in total qualifying medical expenses, including contact lenses, eye exams, and other medical bills, they could deduct $1,000. This figure is calculated by subtracting the AGI threshold from their total medical costs ($5,500 – $4,500). If their total medical expenses were $4,000, they would not be able to deduct any amount because the total is below the 7.5% AGI floor.

How to Claim the Medical Expense Deduction

Once you have confirmed your expenses qualify and calculated your deductible amount, the final step is to report it correctly on your tax return. You will report the total of your medical and dental expenses on the designated line for itemized deductions. The form’s instructions guide you through the 7.5% AGI calculation to arrive at your final deductible amount.

You should retain all receipts for your contact lenses, solutions, and eye exams, along with any prescriptions or statements from your eye doctor. While you do not submit these documents with your return, you must have them available as proof in the event the IRS has questions or selects your return for an audit.

Using Tax-Advantaged Health Accounts for Eye Care

Many people use tax-advantaged accounts like a Flexible Spending Account (FSA) or a Health Savings Account (HSA) to pay for out-of-pocket medical costs. Both FSAs and HSAs allow you to set aside money on a pre-tax basis to pay for qualifying expenses, and contact lenses and related supplies are eligible for reimbursement from these accounts. Using these funds provides an immediate tax benefit by reducing your taxable income.

A critical rule to understand is the prohibition against “double-dipping.” The IRS is clear that you cannot receive a tax benefit for the same expense twice. This means if you use funds from your FSA or HSA to pay for your contact lenses or eye exams, you cannot also include those same costs when you calculate your medical expense deduction on Schedule A. You must choose one tax benefit or the other for any given expense.