Pub. 502: Claiming Medical and Dental Expenses

The U.S. tax code allows individuals to lessen the financial burden of significant healthcare costs through the medical expense deduction. Guidance for this deduction is found in IRS Publication 502, which outlines the rules for what can be deducted, who is eligible, and how to claim the benefit. This article will explore the eligibility requirements, qualifying expenses, and the method for calculating and claiming the deduction.

Determining Your Eligibility

Before deducting medical costs, you must meet several tests. The first requirement is that you itemize deductions on your federal tax return using Schedule A (Form 1040). Taxpayers choose to itemize when their total specific deductions, such as state and local taxes or mortgage interest, exceed the standard deduction amount. If the standard deduction is higher, you cannot deduct medical expenses.

A central component of eligibility is the Adjusted Gross Income (AGI) threshold. You can only deduct the amount of your total medical expenses that exceeds 7.5% of your AGI. Your AGI is calculated on your Form 1040 and represents your gross income minus certain deductions. For example, if your AGI is $60,000, the threshold is $4,500, and you can only deduct expenses paid beyond that amount.

The final element of eligibility revolves around whose expenses you can include. You can include qualifying medical expenses you pay for yourself and your spouse, provided you were married either when the service was provided or when the expense was paid.

You can also include medical expenses paid for a dependent. For this deduction, a dependent is a qualifying child or relative who meets requirements related to citizenship, relationship, and the amount of support you provide. You can include expenses for any person who was your dependent either at the time the medical services were provided or when you paid the bills.

Identifying Qualifying Medical Expenses

The scope of qualifying medical expenses includes costs for the diagnosis, cure, mitigation, treatment, or prevention of disease. The expense must be primarily for alleviating or preventing a physical or mental illness.

Diagnostic and Treatment Services

Payments for professional medical services are a primary category of deductible expenses. This includes fees paid to physicians, surgeons, dentists, specialists, and non-traditional practitioners like chiropractors and acupuncturists. Mental health services are treated similarly, so payments to psychiatrists, psychologists, and other licensed therapists for medical care are qualifying expenses.

Hospital Care and Residential Nursing

The cost of inpatient care at a hospital, including lodging and meals, is a qualifying medical expense. This also covers nursing services, lab tests, and other procedures administered during the stay. Expenses for long-term care, such as in a nursing home, can also be deductible. If the primary reason for being in the facility is to receive medical care, the entire cost is deductible. Otherwise, only the portion attributable to medical or nursing care is deductible.

Prescription Medications and Insulin

The cost of any medicine that legally requires a prescription is a qualifying expense. Insulin is a notable exception and is deductible even if a prescription is not required for its purchase. Other over-the-counter medicines, such as pain relievers or cold remedies, are not deductible unless they are specifically prescribed by a doctor.

Medical Equipment, Supplies, and Devices

The cost of purchasing or renting medical equipment is deductible. This includes items like crutches, wheelchairs, walkers, hearing aids, and artificial limbs. Diagnostic devices and supplies are also qualifying expenses, such as blood sugar test kits for individuals with diabetes. Vision care expenses, including eyeglasses, contact lenses, and cleaning solutions, are deductible.

Insurance Premiums

You can include premiums you pay with after-tax dollars for policies that cover medical care, including medical, dental, and vision insurance. If your premiums are paid through an employer on a pre-tax basis, you cannot deduct them. Payments for Medicare Part B, Part D, and Medicare Advantage plans are also deductible.

Premiums for qualified long-term care insurance are deductible but are subject to annual limits based on age. For 2025, the limits are:

• $470 for those 40 or younger
• $880 for those 41 to 50
• $1,760 for those 51 to 60
• $4,710 for those 61 to 70
• $5,880 for those over 70

Transportation and Lodging

Transportation costs primarily for and essential to medical care are qualifying expenses. This includes fares for a taxi, bus, or train, as well as ambulance fees. If you use your personal vehicle, you can deduct out-of-pocket expenses for gas and oil or use the standard medical mileage rate of 21 cents per mile for 2025. The cost of lodging while away from home for medical care at a licensed hospital may be deductible up to $50 per night for each person.

Capital Expenses

A capital expense is an amount paid for equipment installed in your home, or for improvements, if the main purpose is medical care. These are deductible to the extent they do not increase the value of your property. Examples include constructing entrance ramps or installing support bars. To calculate the deduction, subtract the increase in your home’s value from the improvement’s cost.

Specifically Non-Qualifying Expenses

It is important to understand what does not qualify as a medical expense. Cosmetic surgery that is not necessary to improve a deformity from a congenital abnormality, personal injury, or disfiguring disease is not deductible. Expenses for general health, such as vitamins, dietary supplements, and gym memberships, are also not deductible. Other non-deductible items include non-prescription drugs (other than insulin), maternity clothes, and funeral expenses.

Calculating Your Deduction

The calculation to determine your medical expense deduction follows a precise sequence. It begins after you have identified all of your qualifying medical expenses for the year.

The first step is to total all qualifying medical expenses you paid during the tax year, regardless of when the service was provided. This includes payments for services, items, and insurance premiums paid with after-tax money.

Next, you must use your Adjusted Gross Income (AGI) from your Form 1040 to find your deduction threshold, which is 7.5% of your AGI.

The final step is to subtract this AGI threshold from your total qualifying medical expenses. For example, if your total medical expenses were $9,500 and your AGI threshold is $6,000, your deduction would be $3,500. If your total expenses are less than the threshold, you do not have a medical expense deduction.

How to Claim the Deduction

After calculating your final deduction amount, you must report it correctly on your tax return. The deduction is claimed on Schedule A (Form 1040), Itemized Deductions.

You will enter your total qualifying medical expenses on line 1 of Schedule A. On line 2, you enter your AGI. On line 3, you multiply your AGI by 7.5% to calculate your threshold. Finally, on line 4, you subtract the threshold from your total medical expenses to arrive at your deductible amount.

A fundamental aspect of claiming any deduction is maintaining thorough and accurate records. While you do not submit receipts with your tax return, you must keep them as proof of your expenses in case of an IRS review. Your records should include receipts from pharmacies and doctors, bank or credit card statements, and Explanation of Benefits (EOB) statements from insurance. For transportation, a mileage log showing the date, purpose, and miles driven is necessary.