Paul Sanchez
Medical expenses can be a significant burden on taxpayers, and many seek to understand if they can claim deductions for medical expense insurance. The IRS allows deductions for unreimbursed medical expenses, including preventative care, treatment, surgeries, dental and vision care, and prescription medications. However, expenses reimbursed by insurance plans or tax-advantaged savings accounts are generally not deductible. To qualify for deductions, medical expenses must exceed 7.5% of the taxpayer's adjusted gross income (AGI) and be itemized on Schedule A (Form 1040). Self-employed individuals may also be eligible for deductions on health insurance premiums. It is important to note that deductions are based on when the medical bill is paid rather than when the service was provided.
| Characteristics | Values |
|---|---|
| Deduction criteria | The IRS allows taxpayers to deduct their total qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income (AGI) if they use IRS Schedule A to itemize their deductions. |
| Reimbursement | Expenses reimbursed by insurance or employers cannot be deducted. |
| Self-employed | Self-employed individuals may be eligible for the self-employed health insurance deduction, which is an adjustment to income for premiums paid on a health insurance policy covering medical care for themselves, their spouse, dependents, and children under 27. |
| Medical expenses | Deductible medical expenses may include fees to doctors, dentists, surgeons, chiropractors, inpatient hospital care, acupuncture treatments, inpatient treatment for drug addiction, smoking cessation programs, prescription drugs, vision care, and transportation costs to and from medical care. |
| Non-deductible expenses | Non-deductible expenses include cosmetic procedures, non-prescription drugs (except insulin), nutritional supplements, vitamins, gym memberships, and certain premiums that aren't tied to the actual cost of medical care received. |
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What You'll Learn
Self-employed health insurance deduction
If you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental, and qualifying long-term care insurance coverage for yourself, your spouse, and your dependents. This is known as the self-employed health insurance deduction. This deduction is applied on a month-to-month basis, so you would only be disqualified from claiming the deduction for the part of the year that you had employer plan coverage.
To be eligible for the self-employed health insurance deduction, you must have a qualifying insurance plan and meet certain Internal Revenue Service (IRS) criteria. For example, if you have access to an employer-sponsored subsidized health insurance plan, you are not eligible for this tax deduction. This is also the case if your self-employment activity is a sole proprietorship that generated a tax loss for the year.
If you are eligible, you may deduct up to 100% of the health insurance premiums you paid during the year on your income tax return. This is an adjustment to income, rather than an itemized deduction, and is beneficial because it lowers your adjusted gross income (AGI). You can claim this deduction regardless of whether you choose to claim the standard deduction or itemize your deductions.
In addition to the self-employed health insurance deduction, there are other ways to deduct medical expenses. For example, you can deduct unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care as qualifying medical expenses. You can also deduct unreimbursed expenses for visits to psychologists and psychiatrists, as well as unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth, and hearing aids. The IRS also lets you deduct the expenses that you pay to travel for medical care, such as mileage on your car, bus fare, and parking fees.
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Deducting unreimbursed medical expenses
If you have medical bills that aren't fully covered by your insurance, you may be able to take a deduction for those to reduce your tax bill. The IRS allows you to deduct unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care as qualifying medical expenses. You can also deduct unreimbursed expenses for visits to psychologists and psychiatrists. Unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth, and hearing aids are also deductible.
The IRS also lets you deduct the expenses that you pay to travel for medical care, such as mileage on your car, bus fare, and parking fees. This includes out-of-pocket expenses for your personal car, such as gas and oil, tolls, and parking; taxi, bus, or train fare; and ambulance costs. You can also include in medical expenses the cost of meals at a hospital or similar institution if a principal reason for being there is to get medical care.
The deduction value for medical expenses varies because the amount changes based on your income. The IRS allows taxpayers to deduct their total qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income (AGI) if the taxpayer uses IRS Schedule A to itemize their deductions. Your AGI is your total income subject to tax from your tax return minus any adjustments to income, such as contributions to a traditional IRA and deductible student loan interest.
For example, if you have an AGI of $45,000 and $5,475 of medical expenses, you would multiply $45,000 by 0.075 (7.5%) to find that only expenses exceeding $3,375 can be included as an itemized deduction. This leaves you with a medical expense deduction of $2,100 ($5,475 minus $3,375). This amount can be included on your Schedule A, Itemized Deductions.
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.
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Medical expenses for general health
Medical expenses can be claimed as tax deductions in some cases. The Internal Revenue Service (IRS) allows taxpayers to deduct their total qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income (AGI). This includes expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease, as well as payments for treatments affecting any structure or function of the body.
To claim the medical expense deduction, taxpayers must itemize their deductions on Schedule A (Form 1040) or 1040-SR when filing their federal income tax return. This means that they must list each deduction separately, rather than taking the Standard Deduction. It's important to note that only unreimbursed medical expenses can be deducted. If an insurance company or employer has reimbursed the taxpayer for a medical expense, it cannot be deducted.
There are a variety of specific medical expenses that are deductible. These include unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care. Unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth, and hearing aids are also deductible. Additionally, the IRS allows deductions for expenses paid for admission and transportation to a medical conference if it concerns the chronic illness of the taxpayer, their spouse, or their dependent. Transportation costs related to medical care, such as mileage on a personal car, bus fare, and parking fees, are also deductible.
Certain costs related to nutrition, wellness, and general health may also be considered deductible medical expenses. However, the IRS generally does not allow deductions for expenses related to general health improvements, such as health club dues, vitamins, diet food, and non-prescription nicotine products. Similarly, expenses for cosmetic procedures are typically not deductible.
It's important to note that the rules and regulations regarding medical expense deductions can be complex and subject to change. Taxpayers should refer to the most up-to-date information provided by the IRS and seek professional advice when necessary to ensure accurate reporting of their medical expenses.
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Tax-deductible medical expenses in 2025
The Internal Revenue Service (IRS) has released the annual inflation adjustments for the tax year 2025. Here is a detailed overview of the tax-deductible medical expenses for that year.
Deductible Medical Expenses
The IRS allows taxpayers to deduct their total qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income (AGI). This means that if your medical expenses are higher than 7.5% of your AGI, you can deduct the excess amount from your taxable income. For example, if your AGI is $45,000 and your medical expenses are $5,475, you can deduct $2,100 ($5,475 minus $3,375, which is 7.5% of $45,000).
To claim these deductions, you must itemize your expenses on Schedule A (Form 1040). This means you need to list each deductible medical expense separately. Deductible medical expenses include:
- Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and non-traditional medical practitioners.
- Inpatient hospital care or residential nursing home care, provided that medical care is the primary reason for residence.
- Acupuncture treatments.
- Inpatient treatment for drug or alcohol addiction, smoking cessation programs, and prescription drugs to alleviate nicotine withdrawal.
- Preventative care, surgeries, dental and vision care, and visits to psychologists and psychiatrists.
- Prescription medications and appliances such as glasses, contact lenses, false teeth, and hearing aids.
- Transportation expenses for medical care, including mileage on your personal vehicle (at the standard mileage rate of 21 cents per mile), bus fare, parking fees, taxi, train, or ambulance costs.
- Insurance premiums for medical or qualified long-term care.
- Meals at a hospital or similar institution if the primary purpose of being there is to receive medical care.
- Admission and transportation to a medical conference if it concerns the chronic illness of yourself, your spouse, or your dependent.
Non-Deductible Medical Expenses
It's important to note that not all medical expenses are deductible. You cannot deduct expenses that have been reimbursed by insurance companies or other sources, including your employer. Additionally, cosmetic procedures, non-prescription drugs (except insulin), general health purchases (like toothpaste, vitamins, diet food, and non-prescription nicotine products), and gym memberships are generally not deductible.
Other Considerations
If you are 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 paid on a health insurance policy covering medical or qualified long-term care for yourself, your spouse, and dependents.
If you missed claiming a deductible medical expense in a previous year, you can file Form 1040-X to claim a refund for that year. This must generally be done within 3 years from the date the original return was filed or within 2 years from when the tax was paid, whichever is later.
Lastly, when it comes to standard deductions for the tax year 2025, the amounts have increased. For single taxpayers and married individuals filing separately, the standard deduction is $15,000, up from $14,600 in 2024. For married couples filing jointly, the standard deduction is $30,000, and for heads of households, it is $22,500.
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Medical expense deduction from taxable income
If you have medical bills that aren't fully covered by your insurance, you may be able to take a deduction for those to reduce your tax bill. The IRS allows you to deduct unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care as qualifying medical expenses. You can also deduct unreimbursed expenses for visits to psychologists and psychiatrists. Unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth, and hearing aids are also deductible.
The deduction value for medical expenses varies because the amount changes based on your income. The IRS allows all taxpayers to deduct their total qualified unreimbursed medical care expenses that exceed 7.5% of their adjusted gross income (AGI). Your AGI is your total income subject to tax from your tax return minus any adjustments to income, such as contributions to a traditional IRA and deductible student loan interest. For example, if you have an AGI of $45,000 and $5,475 of medical expenses, you would multiply $45,000 by 0.075 (7.5%) to find that only expenses exceeding $3,375 can be included as an itemized deduction. This leaves you with a medical expense deduction of $2,100 ($5,475 minus $3,375).
Deductible medical expenses may include but are not limited to the following:
- Amounts paid for 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 center 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 insurance premiums to cover medical care or qualified long-term care
- Amounts paid for transportation primarily for and essential to medical care that qualify for the medical expense deduction. This includes out-of-pocket expenses for your personal car, such as gas and oil, or the standard mileage rate for medical expenses, plus the cost of tolls and parking; taxi, bus, or train fare; and ambulance costs
- Amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent
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.
Any medical expenses you get reimbursed for, such as by your insurance or employer, can't be deducted. In addition, the IRS generally disallows expenses for cosmetic procedures. You typically can't deduct the cost of nonprescription drugs (except insulin) or other purchases for general health, such as toothpaste, health club dues, vitamins, diet food, and nonprescription nicotine products. You also can't deduct medical expenses paid in a different year.
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Frequently asked questions
Yes, you cannot deduct expenses that were reimbursed by an insurance plan, a flexible spending account, a health savings account, or another tax-advantaged savings account. You also cannot deduct the cost of nonprescription drugs (except insulin) or other purchases for general health, such as toothpaste, health club dues, vitamins, diet food, and nonprescription nicotine products.
You can deduct unreimbursed expenses for preventative care, treatment, surgeries, and dental and vision care as qualifying medical expenses. You can also deduct unreimbursed expenses for visits to psychologists and psychiatrists. Unreimbursed payments for prescription medications and appliances such as glasses, contacts, false teeth, and hearing aids are also deductible.
While most individuals are not eligible to deduct health insurance premiums from their taxes, there are some circumstances to be aware of if you pay for premiums with after-tax dollars. If you get insurance in the Health Insurance Marketplace, you can deduct the full cost of your health care premiums from your taxable income, even if you don't itemize your taxes.
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