Medical Expense Deduction

The medical expense deduction lets itemizers deduct unreimbursed medical and dental costs, but only the portion that exceeds 7.5% of your Adjusted Gross Income — everything below that floor provides no tax benefit at all. Qualifying costs include payments to doctors, dentists, and hospitals, prescription medications, medical equipment, and health insurance premiums you paid with after-tax dollars rather than pre-tax payroll deductions.

You total your qualifying medical expenses for the year and enter them on Schedule A, where the form subtracts 7.5% of your AGI before the remainder becomes deductible. Because the floor is a fixed percentage of income rather than a flat dollar amount, higher earners need proportionally larger medical bills before this deduction does anything for their tax return, which is why most taxpayers never claim it in an ordinary year.

A major medical event — surgery, a hospital stay, or an extended course of treatment — is usually what pushes a taxpayer over the 7.5% floor, since routine annual expenses like checkups and prescriptions rarely clear it on their own. Transportation to receive medical care, long-term care insurance premiums subject to age-based dollar limits, and home modifications made for medical reasons, like a wheelchair ramp, all count toward the total. Cosmetic procedures, over-the-counter medicine without a prescription, and general wellness expenses like gym memberships do not qualify, a distinction that trips people up when tallying receipts.