Pub. 502: Medical and Dental Expense Deduction

The medical expense deduction allows taxpayers with high healthcare costs to lower their taxable income. This tax benefit is detailed in IRS Publication 502, which outlines the specific rules and qualifications. The deduction is not available to everyone, as it requires a taxpayer’s costs to exceed a specific percentage of their income. This provision is designed to offer financial relief for costs associated with diagnosing, curing, mitigating, treating, or preventing disease.

Determining Whose Expenses You Can Include

A taxpayer can include medical costs for themselves, their spouse, and any individuals who qualify as their dependents. For a spouse, expenses are eligible if the couple was married either when the medical services were provided or when the bills were paid. This allows for flexibility if medical care was received before a marriage, but payment was made after.

A person qualifies as your dependent if they are a qualifying child or a qualifying relative, a definition that can be more flexible for medical expenses. For instance, a noncustodial parent can include medical expenses they pay for their child, even if the other parent claims the child as a dependent.

To be a qualifying relative, a person must meet several criteria, including income and support tests where you provide more than half of their total support for the year. A person can also be a dependent under a multiple support agreement. In this case, if a group collectively provides more than half of an individual’s support, any member contributing more than 10% can claim the medical expenses they paid, provided the others agree not to claim the individual.

You can also include medical expenses you paid for a decedent. If you pay the medical expenses of a deceased spouse or dependent, you can include them whether they are paid before or after death. The timing of the payment determines which tax year the deduction can be taken in.

Qualifying Medical Expenses

Deductible medical expenses are costs incurred to diagnose, treat, or prevent physical or mental illness. Publication 502 details a wide range of qualifying services and products, distinguishing them from non-deductible general wellness costs.

Included Expenses

Deductible costs include fees paid to doctors, dentists, surgeons, chiropractors, psychologists, and other medical practitioners. Other qualifying expenses include:

• Hospital services, including inpatient care and meals.
• Nursing home care, including meals and lodging, if the primary reason for the stay is to receive medical care.
• Prescription medications and insulin.
• Medical equipment like wheelchairs, crutches, hearing aids, artificial limbs, and diagnostic devices such as blood sugar test kits.
• Transportation to and from medical care, calculated using actual costs for gas and oil or the standard medical mileage rate of 21 cents per mile for 2025.
• Lodging while away from home for medical care, up to $50 per night for each person.

Excluded Expenses

Many health-related purchases are not deductible medical expenses, such as:

• Over-the-counter medications (except insulin) unless prescribed by a doctor.
• Items beneficial to general health, such as vitamins, diet foods, or a gym membership.
• Cosmetic surgery, unless it is to improve a deformity from a congenital abnormality, an injury from an accident, or a disfiguring disease.
• Funeral or burial expenses.
• Non-prescription items like toothpaste, toiletries, or cosmetics.

Calculating Your Deduction

The ability to deduct medical expenses is limited by 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 means that only those with high medical costs in comparison to their income will benefit from the deduction.

First, calculate your AGI for the tax year. Next, add up all of your qualifying medical expenses paid out-of-pocket. You cannot include expenses paid for by an insurance company, your Health Savings Account (HSA), or a Flexible Spending Arrangement (FSA).

From this total, you must subtract any reimbursements you received to find your net qualifying medical expenses. If you receive a reimbursement in a later year for an expense you deducted in a prior year, you may need to report that reimbursement as income.

The final step is to apply the AGI limitation. Multiply your AGI by 7.5% (0.075) and subtract this result from your net qualifying medical expenses. For example, if your AGI is $60,000, your AGI threshold is $4,500. If you had $8,000 in net medical expenses, your deduction would be $3,500 ($8,000 – $4,500).

How to Claim the Deduction

To claim the medical expense deduction, you must itemize deductions on your federal income tax return by filing Schedule A (Form 1040). Taxpayers who take the standard deduction cannot also deduct their medical expenses. You should compare your total itemized deductions to your available standard deduction to see which option provides a greater tax benefit.

The calculated medical expense deduction amount is entered on Schedule A. On the form, you will enter your total medical expenses and your AGI, and perform the 7.5% calculation to arrive at the final deductible amount.

Thorough record-keeping is part of claiming this deduction. You should keep all receipts, statements from providers, and records of payment for any expense you include. For transportation costs, a logbook detailing mileage for medical trips is recommended.

You should also retain statements from your insurance company showing any reimbursements you received, as this substantiates your out-of-pocket costs. These records support your claim in the event the IRS has questions or conducts an audit.