How Much Medical Expenses Can You Deduct on Your Taxes?

Medical expenses can add up quickly, but the IRS allows taxpayers to deduct some costs if they meet certain criteria. This deduction can reduce taxable income and lower overall tax liability, making it valuable for those with significant healthcare expenses. However, not all medical costs qualify, and specific rules determine how much can be deducted.

Understanding what qualifies, how to claim the deduction, and what documentation is required ensures taxpayers maximize savings while staying compliant with tax laws.

Deduction Threshold

For the 2024 tax year, only medical expenses exceeding 7.5% of a taxpayer’s adjusted gross income (AGI) are deductible. For example, someone with a $50,000 AGI can deduct expenses beyond $3,750. If their total eligible expenses are $5,000, they can deduct $1,250.

This threshold applies regardless of filing status. Higher-income individuals may find it harder to benefit since their AGI threshold is higher, requiring more out-of-pocket costs before deductions apply.

Only unreimbursed expenses count. If insurance or an employer covers part of the cost, only the remaining amount can be included. Additionally, expenses must be paid during the tax year being filed, regardless of when the medical service occurred.

Coverage Gaps and Reimbursements

Even with insurance, many individuals face out-of-pocket costs from deductibles, copayments, and uncovered services. For example, if a procedure costs $10,000 with 20% coinsurance, the patient owes $2,000. These amounts qualify as deductible medical expenses if not reimbursed.

Some treatments and services are excluded from insurance policies, requiring patients to cover the full cost. Alternative therapies, elective procedures, and experimental treatments often fall into this category. If a doctor prescribes acupuncture for pain management but insurance does not cover it, the full expense may qualify for a deduction. Fertility treatments, such as in vitro fertilization, can also be deducted if not reimbursed.

Employer-provided benefits affect what can be claimed. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) allow individuals to pay for medical expenses with pre-tax dollars, but any amount paid through these accounts cannot be deducted again. If an employer reimburses part of a medical bill, that amount must be excluded from the deduction calculation.

Itemization Guidance

To claim medical expenses, taxpayers must itemize deductions instead of taking the standard deduction. The decision depends on whether total itemized deductions, including medical costs, mortgage interest, state and local taxes, and charitable contributions, exceed the standard deduction amount. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. If total itemized deductions do not surpass these thresholds, itemizing medical expenses provides no tax benefit.

Taxpayers who itemize should use Schedule A (Form 1040) to report medical expenses separately from other deductions. The IRS requires the total amount to be calculated before applying the 7.5% AGI limitation, with only the portion exceeding this threshold being deductible.

To maximize deductions, individuals may consider timing medical payments strategically. If a costly procedure is planned for early 2025, prepaying in 2024 could increase deductible expenses for that tax year, provided the payment is made before December 31.

Types of Services and Procedures

Deductible medical expenses extend beyond routine doctor visits and hospital stays. Surgeries, specialist treatments, and medically necessary dental procedures qualify as long as they are not purely cosmetic. Prescription eyeglasses, contact lenses, and corrective eye surgeries like LASIK also qualify if deemed necessary by a physician.

Long-term care expenses can be deducted if they relate to medical services. This includes payments to nursing homes, assisted living facilities, and in-home nursing care when the primary reason is medical. Lodging costs at such facilities qualify only if necessary for treatment.

Certain home modifications, such as installing wheelchair ramps, widening doorways, or adding stair lifts, can be deducted if made to accommodate a medical condition rather than for convenience.

Documentation Essentials

Maintaining thorough records is necessary to substantiate medical expense deductions in case of an IRS audit. Receipts, invoices, and statements should clearly show the amount paid, date of payment, and nature of the medical service. These documents should also specify the provider’s name and confirm that the expense was not reimbursed. Without proper documentation, deductions may be disallowed.

Bank and credit card statements can serve as supplementary proof but should be paired with itemized bills to confirm medical necessity. If expenses are shared—such as when an adult child pays for a parent’s care—proof of financial responsibility should be retained. Taxpayers should store records for at least three years after filing, as the IRS can audit returns within this period.