Medical Expenses Tax Deduction: Avoid Common Misunderstandings and Maximize Your Benefits

Medical expenses can create a significant financial burden, and while the IRS allows certain medical costs to be deductible, the rules are complex and often misunderstood. Most importantly, to claim the medical expense deduction, you must itemize your deductions using Schedule A on Form 1040 or 1040-SR. If you take the standard deduction instead, medical expenses—regardless of amount—will not reduce your tax liability.

Itemizing deductions can be confusing, and a key concept to understand is the 7.5 percent adjusted gross income (AGI) threshold for medical expenses. Only the portion of your unreimbursed medical costs that exceeds 7.5 percent of your AGI is deductible. For example, if your AGI is $60,000, the threshold is $4,500. If your total medical expenses are $7,500, only $3,000—the amount above the threshold—can be deducted. Medical expenses are just one component of itemized deductions, which can also include other expenses such as state and local income taxes, real estate and personal property taxes, mortgage interest, and charitable contributions. For instance, if you paid $3,000 in state income taxes, $2,000 in real estate and personal property taxes, $8,000 in mortgage interest, $1,500 in charitable contributions, and $3,000 in deductible medical expenses, a single filer would have total itemized deductions of $17,500. This exceeds the 2025 standard deduction of $16,100 for a single filer, making itemizing the better choice. For a married couple filing jointly, with a 2025 standard deduction of $32,200, itemizing in this example would provide less benefit than taking the standard deduction, highlighting why understanding the rules and calculations is essential.

You can generally include medical and dental expenses paid for yourself, your spouse, or your dependents, as well as certain individuals who could otherwise qualify as dependents under IRS rules. Deductible expenses cover a broad range of care, including insurance premiums, prescription medications, services from medical professionals, hospital and clinic fees, diagnostic tests, nursing or long-term care, and medical equipment such as eyeglasses, hearing aids, or mobility aids. Certain specialized treatments, surgeries, and programs prescribed for medical conditions may also qualify. Transportation and lodging costs directly related to medical care can also be deducted. If you travel by car, you can claim actual expenses or the IRS standard mileage rate, including parking and tolls. Lodging required for treatment is deductible, but meals are not.

Certain expenses are not deductible, including nonprescription medications (except insulin), cosmetic surgery unless medically necessary, diet foods, illegal procedures or drugs, nursing care for a healthy baby, funeral costs, and life insurance or income protection premiums. Insurance premiums paid through an employer-sponsored or pre-tax plan are generally excluded unless included in taxable wages. Deductions may also be affected by distributions from health or medical savings accounts, and any reimbursements from insurance or other sources must reduce the expenses claimed in the year received.

Medical expense deductions are most beneficial for taxpayers who face major medical events, pay high out-of-pocket premiums, incur significant dental or vision costs, have a relatively low AGI, or cover long-term care expenses. Keeping detailed records, receipts, and careful documentation, while understanding IRS rules regarding reimbursements and eligible individuals, ensures you claim all the deductions to which you are entitled.

Ultimately, medical expenses can provide a valuable tax benefit, but itemizing is required to take advantage of them. Considering all itemized deductions—including medical expenses, state and local taxes, mortgage interest, and charitable contributions—can help determine whether itemizing or taking the standard deduction offers the greater benefit. For single filers with substantial expenses, itemizing is often the better choice, whereas married couples filing jointly may find the standard deduction more advantageous in many cases.

The information provided in this blog post is intended for general informational purposes only and should not be construed as legal or tax advice. While every effort has been made to ensure the accuracy of the information, tax laws and regulations are subject to change, and individual circumstances may vary. For personalized advice and to ensure compliance with current tax laws, it is strongly recommended that you consult with a qualified tax professional, financial advisor, or legal counsel. The author and publisher of this blog assume no responsibility for any errors or omissions, or for any actions taken based on the information contained herein.