How to Report Medical Expenses on Schedule A

Taxpayers who itemize deductions on their federal tax return can deduct significant medical and dental costs. This benefit is for those whose qualifying health-related expenditures surpass a set percentage of their adjusted gross income (AGI). This deduction is claimed on Schedule A (Form 1040).

Determining Qualifying Medical Expenses

The Internal Revenue Service (IRS) defines medical care expenses as payments for the diagnosis, cure, mitigation, treatment, or prevention of disease. This includes payments to physicians, dentists, surgeons, chiropractors, and psychologists. The costs of hospital and nursing home care are also qualifying expenses if the primary reason for the stay is to receive medical care. Prescription medications, insulin, and medical aids like eyeglasses, contact lenses, and hearing aids are also deductible.

Transportation costs for medical care are also eligible for deduction. This can include the actual cost of gas and oil or the standard medical mileage rate, which for 2025 is 19 cents per mile. You can also include fares for taxis, buses, trains, airplanes, and ambulance service fees. The cost of lodging while away from home for medical care can be included, up to $50 per night for each person.

Premiums paid for insurance policies that cover medical care can be included, provided they are paid with after-tax dollars. Premiums for qualified long-term care insurance are also deductible, but the amount is subject to limits based on age. For 2025, these limits are as follows:

• Age 40 or under: $490
• Age 41 to 50: $930
• Age 51 to 60: $1,860
• Age 61 to 70: $4,960
• Age 71 or older: $6,200

It is also important to recognize which expenses are not deductible. You cannot deduct the cost of non-prescription drugs, with the exception of insulin. Other non-qualifying expenses include toiletries, cosmetic surgery not medically necessary, and items beneficial to general health. Costs for vitamins, diet foods, or a gym membership are not deductible even if recommended by a doctor for overall well-being.

Calculating the Medical Expense Deduction

The medical expense deduction is based on an income threshold. Taxpayers can only deduct the portion of their total qualifying medical expenses that exceeds 7.5% of their adjusted gross income (AGI). Your AGI is your gross income minus certain deductions and is found on your Form 1040.

To determine your deductible amount, first sum all of your qualifying, unreimbursed medical expenses for the year. Next, find your AGI on your Form 1040. You then calculate your income threshold by multiplying your AGI by 7.5% (0.075).

For example, a taxpayer with an AGI of $60,000 and $7,000 in qualifying medical expenses has an AGI threshold of $4,500 ($60,000 x 0.075). The deductible portion is found by subtracting this threshold from their total expenses, resulting in a $2,500 deduction ($7,000 – $4,500). If their total expenses were $4,000, they would not be able to claim a deduction.

This calculation is a factor in the decision to itemize deductions versus taking the standard deduction. If your total itemized deductions do not exceed the standard deduction for your filing status, you will not receive a tax benefit from itemizing. Compare the two options to choose the one that results in a lower tax liability.

Information and Records for Claiming the Deduction

Claiming the medical expense deduction requires organized record-keeping. While you do not submit these documents with your tax return, you must have them available to substantiate your claims in case of an IRS inquiry or audit. It is recommended to keep these records for at least three years from the date you file.

Your records should include all receipts and bills from doctors, dentists, hospitals, and other healthcare providers. You should also retain statements from pharmacies for prescription purchases and receipts for any medical aids you bought, such as glasses or hearing aids.

The Explanation of Benefits (EOB) statement from your insurance provider is important documentation. EOBs detail what your insurance plan covered and the portion of the bill you were responsible for paying. For travel-related medical costs, maintain a logbook noting the dates, mileage, and medical purpose of each trip.

Keep statements that show your payments for health insurance or qualified long-term care insurance premiums. If premiums are paid through payroll deductions, your W-2 form will show the pre-tax amount, which is not deductible.

How to Report on Schedule A

The final step is reporting the information on Schedule A (Form 1040). The medical and dental expenses section of the form guides you through the calculation.

You will enter your total unreimbursed medical expenses on Line 1 and your AGI from Form 1040 on Line 2. The form then instructs you to multiply your AGI by 7.5% on Line 3.

On Line 4, you subtract the Line 3 amount from your total expenses on Line 1. A positive result is your medical expense deduction. If the result is zero or less, you do not have a deduction. This amount is then added to your other itemized deductions.