Summary

If you've had major medical or dental expenses in 2024 or 2025, you might be able to deduct some of those costs from your taxes. The IRS allows deductions for certain unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI), though some states may offer more generous rules. Knowing what qualifies, how to document expenses, and whether it’s worth itemizing instead of taking the standard deduction can help you decide if this tax break applies to you.

🩺 What Counts Toward the Medical Expense Tax Deduction?

The IRS allows taxpayers to deduct qualified medical and dental expenses that exceed 7.5% of their AGI. These deductions apply only to unreimbursed costs — meaning if your insurance covered an expense or you used a flexible spending account (FSA), it doesn’t count. Deductible expenses can range widely, from visits to doctors, surgeons, psychologists, and chiropractors to payments for prescription drugs, glasses, hearing aids, and even certain transportation costs to medical appointments. Procedures like laser eye surgery and breast reconstruction following a mastectomy may also be included. Other allowable expenses include long-term care insurance premiums, lactation supplies, in vitro fertilization, and addiction recovery programs. However, not everything qualifies. Costs for cosmetic procedures, over-the-counter drugs, and general wellness products like toothpaste and vitamins typically aren’t deductible. IRS Publication 502 provides an exhaustive list of what does and doesn’t count.

Takeaways:

• You can only deduct medical expenses that exceed 7.5% of your AGI and were not reimbursed.

• Eligible expenses include payments for medical professionals, insurance premiums paid out of pocket, prescription items, certain surgeries, and transportation for care.

• Cosmetic procedures, over-the-counter drugs, and general wellness items typically do not qualify.

Key Terms

• Adjusted Gross Income (AGI): Your total income minus specific deductions, used to calculate your taxable income.

• Unreimbursed Expenses: Medical or dental costs that were not paid by insurance or covered through an FSA or HSA.

• IRS Publication 502: A resource that outlines deductible and non-deductible medical expenses in detail.

🧾 How to Claim Medical Expenses on Your Taxes

To claim medical expenses, you’ll need to itemize deductions on your federal tax return using Schedule A. This can be worthwhile if your itemized deductions exceed the standard deduction, which in 2024 ranges from $14,600 to $29,200 depending on your filing status. You should gather documentation, such as bills and pharmacy receipts, and maintain detailed records. Your tax software can guide you through Schedule A, or you can consult a tax professional. Consider your filing status carefully — in some cases, married couples filing separately may gain a higher medical expense deduction than if they file jointly, but this strategy might eliminate other tax benefits. Understanding your state’s deduction rules is also crucial. States like New Jersey have lower AGI thresholds for medical deductions, which might allow a deduction on your state return even if you can’t deduct the expenses federally.

Takeaways:

• Itemizing is required to deduct medical expenses — the standard deduction won't allow it.

• Schedule A of IRS Form 1040 is where the medical expense deduction is claimed.

• Filing separately can sometimes increase the allowable deduction, but may reduce eligibility for other tax breaks.

• Some states have different, often lower, AGI thresholds for medical deductions.

Key Terms

• Schedule A: A tax form used to list itemized deductions, including medical expenses.

• Standard Deduction: A flat dollar amount that reduces taxable income, available to all taxpayers who don’t itemize.

• State Threshold: The income limit a state sets for deducting medical expenses, which may differ from federal rules.

Conclusion

If you’ve had high out-of-pocket medical costs this year, it’s worth checking whether your expenses exceed the 7.5% AGI threshold to qualify for a tax deduction. Review eligible expenses carefully, decide if itemizing makes sense for your situation, and don’t forget to factor in state-level rules, which may differ from federal guidelines. Good recordkeeping is essential, and so is knowing when a tax advisor might help you make the most of this potential break.