Taxpayers can deduct medical expenses by itemizing them on their taxes. However, these deductions may be out of your reach as the current standard deduction is high. In 2024, the standard deduction is $14,600 for individuals and $29,200 for joint filers. Therefore, taxpayers generally itemize deductions if the total amount is greater than the standard deduction. If you itemize deductions, and you have unreimbursed expenses for necessary medical or dental care, you may be able to claim a tax deduction if they exceed 7.5% of your adjusted gross income. Here are five expenses you may be able to deduct.
A financial advisor can help you optimize your financial plan to lower your tax liability.
A financial advisor may be able to help. Match with an advisor serving your area today.
In some cases, the IRS allows you to deduct medical costs, including dental expenses, from your taxes. In general, the following rules apply to any deduction you want to claim:
The personal spending requirement means that you cannot claim a deduction for payments made on your behalf. And the deduction only applies to spending above the cap. For example, say that you make $100,000 in taxable income and have $10,000 in combined medical expenses. You cannot deduct the first $7,500 (7.5% * $100,000) but you can deduct the remaining $2,500 in spending.
Households with very significant medical bills may get more value from itemized medical deductions than the standard deduction. If you would like to check whether you can deduct your medical expenses, the IRS offers an interactive assistant. Here are five medical expenses the that the agency allows to deduct:
Qualifying taxpayers can deduct the monthly premiums that they pay for insurance coverage. These include expenses to HMOs, long-term care insurance and Medicaid payments.
Not all insurance will qualify for this tax deduction, so make sure that your coverage does. It also applies to dental insurance, which can often be more expensive than medical coverage.
Even when you have dental insurance, it frequently doesn’t offer the same kind of comprehensive coverage as medical insurance. Often dental insurance simply reduces or restructures how you pay for treatment. As a result, even among individuals with insurance it’s common to pay significant out-of-pocket expenses for dental treatment.
This spending is tax deductible if you meet the general rules for medical deductions. That can include spending on cleanings, X-rays, fillings, braces and other treatments, but not for cosmetic processes like teeth whitening.
Whether you see a private practitioner, a psychologist, a chiropractor, a surgeon, a specialist, or other form of medical practitioner, you can take a qualified deduction for treatment fees.
This deduction also can apply to nontraditional practitioners such as acupuncturists. It applies more broadly as well to treatment at rehabilitation centers, weight loss programs and cessation treatment for drugs, alcohol and smoking.
Finally, you can deduct the fees you pay for treatment at medical facilities. For example, a qualifying taxpayer can deduct their expenses for hospital care or a stay in a nursing home. This deduction can include all of your costs of care, not just direct medical treatment. For example, you can deduct the costs of food and lodging during a hospital stay.
After treatment, a patient may need to pay out of pocket for insulin and other prescription drugs. So long as you meet the qualifications, and the drugs are considered necessary rather than cosmetic or otherwise optional, this spending is tax deductible.
As with dental treatment, this is a common source of significant expenses since insurance often will not fully cover drug costs.
Medical devices are in a broad category, and you can deduct qualified spending within it.
While medical devices generally apply to urgent care, such as pacemakers and oxygen tanks, it can also refer to much more common spending as well. For example, you can deduct expenses for eyeglasses, contact lenses, hearing aids, crutches, wheelchairs and service animals.
For most households, if you itemize your taxes, there’s a good chance that you will have some medical device spending to claim.
Most forms of medical spending, from insurance premiums to treatment, are tax deductible if you meet the IRS’ requirements. To claim this deduction you must take itemized deductions rather than the standard deduction and must have spent more than 7.5% of your income on qualified medical bills.
Photo credit: ©iStock.com/Igor Alecsander, ©iStock.com/fizkes
Eric ReedEric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
Read More About Taxes
More from SmartAsset
SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. SmartAsset's services are limited to referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. SmartAsset receives compensation from Advisers for our services. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any user's account by an Adviser or provide advice regarding specific investments.
We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.
This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.
