Jeffrey Wade
The IRS allows you to deduct certain medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI).. These include unreimbursed payments for preventative care, treatment, surgeries, dental and vision care, prescription medications, and travel for qualified medical care. However, expenses reimbursed by insurance or your employer, cosmetic procedures, and non-prescription drugs are generally not deductible. So, while insurance deductibles can be considered medical expenses in certain cases, it's important to understand the specific criteria and limitations outlined by the IRS.
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What You'll Learn
Medical expenses that can be deducted from taxes
In the United States, you may be able to deduct medical and dental expenses that you paid for yourself, your spouse, and your dependents during the taxable year. However, these expenses must exceed 7.5% of your adjusted gross income for the year to qualify. It is important to note that this deduction only applies to expenses not compensated by insurance or other means, regardless of whether you receive reimbursement directly or payment is made on your behalf to the medical provider.
The deductible medical expenses may include, but are not limited to:
- Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.
- Inpatient hospital care or residential nursing home care, provided that the availability of medical care is the principal reason for residence in the nursing home.
- Acupuncture treatments.
- Inpatient treatment at a center for alcohol or drug addiction.
- Participation in a smoking-cessation program and prescription drugs to alleviate nicotine withdrawal.
- Prescription medications and appliances such as glasses, contacts, false teeth, and hearing aids.
- Transportation expenses, including mileage on your car, bus fare, parking fees, taxi, train, or ambulance costs.
- Insurance premiums for medical or qualified long-term care.
It is important to note that you cannot deduct medical expenses that were reimbursed by your insurance or employer. Additionally, the IRS generally disallows deductions for cosmetic procedures, non-prescription drugs (except insulin), and other general health purchases like toothpaste, health club dues, vitamins, and diet food.
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What constitutes a medical expense
The Internal Revenue Service (IRS) allows taxpayers to deduct certain unreimbursed medical expenses. These expenses must be for the diagnosis, cure, mitigation, treatment, or prevention of a disease, or for treatments affecting any structure or function of the body. They must also exceed 7.5% of the taxpayer's adjusted gross income (AGI) for the year.
Deductible medical expenses may include but are not limited to:
- Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.
- Inpatient hospital care or residential nursing home care, if the availability of medical care is the principal reason for being in the nursing home, including the cost of meals and lodging charged by the hospital or nursing home.
- Acupuncture treatments.
- Inpatient treatment at a center for alcohol or drug addiction; participation in a smoking-cessation program and prescription drugs to alleviate nicotine withdrawal.
- Preventative care, treatment, surgeries, dental and vision care, visits to psychologists and psychiatrists, prescription medications, appliances such as glasses, contacts, false teeth and hearing aids, and expenses that you pay to travel for qualified medical care.
- Transportation costs, including out-of-pocket expenses for a personal car (e.g. gas and oil), the standard mileage rate for medical expenses, tolls, parking, taxi, bus, or train fare, and ambulance costs.
- Insurance premiums to cover medical care or qualified long-term care.
- Funeral or burial expenses.
Expenses that are not deductible include:
- Nonprescription medicines.
- Toiletries, toothpaste, or cosmetics.
- Trips or programs for the general improvement of health.
- Cosmetic surgery.
- Nicotine gum and nicotine patches that don't require a prescription.
- Pre-tax salary contributions to an employer-sponsored health insurance plan.
- Premiums paid by your employer.
- Medical expenses paid using a flexible spending account or health savings account.
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Medical expenses that cannot be deducted from taxes
Generally, you can deduct unreimbursed medical expenses for yourself, your spouse, and your dependents. However, there are certain medical expenses that cannot be deducted from your taxes. These include:
- Any medical expenses that were paid by insurance companies or other sources, including employer-sponsored premiums paid under a premium conversion plan, cafeteria plan, or any other medical and dental expenses paid by the plan.
- Nonprescription drugs (except insulin) or other purchases for general health, such as toothpaste, vitamins, diet food, and nonprescription nicotine products like nicotine gum and patches.
- Funeral or burial expenses.
- Amounts paid for a trip or program for the general improvement of your health, such as health club dues.
- Most cosmetic surgery procedures.
- Medical expenses paid in a different year, as you can only include the medical and dental expenses paid in the current tax year.
- Contributions made to a health savings account (HSA) or a flexible spending account.
- Pre-tax salary contributions made to an employer-sponsored health insurance plan.
- Premiums paid for certain types of policies that aren't tied to the actual cost of the medical care received, such as a policy that pays a fixed amount per day of hospitalization.
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Medical insurance premiums and deductibles
If you have an employer-sponsored health insurance plan, you cannot deduct your monthly premiums. However, you may be able to deduct out-of-pocket premiums, as long as you do not use an HSA to cover those costs. Self-employed individuals may be eligible for a self-employed health insurance deduction, which is an adjustment to income rather than an itemized deduction. This applies to premiums paid on a health insurance policy covering medical or qualified long-term care for yourself, your spouse, your dependents, and any children under 27, even if they are not your dependents.
Deductible medical expenses include but are not limited to: doctor's fees, inpatient hospital care, prescription drugs, dental and vision care, and travel costs to and from medical care. Non-deductible expenses include cosmetic procedures, non-prescription drugs, and general health purchases such as vitamins, diet food, and non-prescription nicotine products.
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Medical expenses for self-employed individuals
Self-employed individuals can deduct unreimbursed payments for preventative care, treatment, surgeries, dental and vision care, visits to psychologists and psychiatrists, prescription medications, appliances such as glasses, contacts, false teeth and hearing aids, and expenses that you pay to travel for qualified medical care. If you pay for your medical expenses using money from a flexible spending account or health savings account, those expenses aren't deductible because the money in those accounts is already tax-advantaged.
If you're self-employed and have a net profit for the year, you may be eligible for the self-employed health insurance deduction. This is an adjustment to income, rather than an itemized deduction, for premiums you paid on a health insurance policy covering medical care, including a qualified long-term care insurance policy for yourself, your spouse, and dependents. The policy can also cover your child who is under the age of 27 at the end of the year, even if the child wasn't your dependent.
You can deduct medical expenses for anyone who qualifies as your spouse or dependent. If you're divorced, you can deduct any qualifying bills you pay for your children as a medical expense. You can also deduct medical expenses you pay for any other person who pays Medicare tax on wages and tips as part of self-employment tax or household employment taxes.
You can deduct medical and dental expenses you paid for yourself, your spouse, and your dependents during the taxable year to the extent these expenses exceed 7.5% of your adjusted gross income for the year. The deduction applies only to expenses not compensated by insurance or otherwise regardless of whether you receive the reimbursement directly or payment is made on your behalf to the doctor, hospital, or other medical provider.
Deductible medical expenses may include but are not limited to the following: amounts paid in fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners; amounts paid for inpatient hospital care or residential nursing home care, if the availability of medical care is the principal reason for being in the nursing home, including the cost of meals and lodging charged by the hospital or nursing home; amounts paid for acupuncture treatments; amounts paid for inpatient treatment at a centre for alcohol or drug addiction; amounts paid for participation in a smoking-cessation program and for prescription drugs to alleviate nicotine withdrawal; amounts paid for nonprescription medicines; amounts paid for a trip or program for the general improvement of your health; amounts paid for most cosmetic surgery; amounts paid for nicotine gum and nicotine patches that don't require a prescription; and health insurance costs of self-employed individuals.
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Frequently asked questions
Deductible medical expenses include but are not limited to fees to doctors, dentists, surgeons, inpatient hospital care, prescription drugs, and medical equipment.
Yes, you can deduct health insurance premiums as a medical expense, but only if they are not deducted in pretax dollars from your paycheck.
No, you can only deduct out-of-pocket medical expenses. You cannot deduct expenses that were reimbursed or paid by insurance or your employer.
To be deductible, a medical expense must be unreimbursed and alleviate or prevent a physical or mental defect or illness. It cannot be for general health benefits, like vitamins or a vacation.
