Americans spent an average of $6,651 per person on out-of-pocket healthcare costs in 2025, according to CMS estimates. If you had a major surgery, chronic illness, or expensive prescriptions, you may be able to deduct a significant portion of those costs on your federal tax return. The catch: only expenses exceeding 7.5% of your adjusted gross income are deductible, and you must itemize. This guide explains exactly how the deduction works, what qualifies, and how to avoid the mistakes that trigger IRS scrutiny.
1. How the medical expense deduction works
The medical expense deduction is claimed on Schedule A (Form 1040) as an itemized deduction. Here’s how it works:
- Add up all qualifying medical and dental expenses you paid during the tax year.
- Subtract any reimbursements from insurance, HSA/FSA distributions, or other sources.
- Calculate 7.5% of your AGI (the number on Line 11 of Form 1040).
- Deduct only the amount that exceeds that 7.5% threshold.
This means the deduction only helps if your unreimbursed medical expenses are substantial relative to your income. It also only helps if your total itemized deductions (medical + state/local taxes + mortgage interest + charitable contributions) exceed the standard deduction ($15,700 single / $31,400 married filing jointly in 2026).
2. What qualifies as a deductible medical expense
The IRS defines deductible medical expenses as costs for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.” Here’s a comprehensive list organized by category:
| Category | Deductible Expenses |
|---|---|
| Doctor & hospital | Office visits, surgery, hospital stays, lab tests, imaging (X-rays, MRIs, CT scans), physical exams |
| Dental | Cleanings, fillings, crowns, bridges, dentures, braces, extractions, dental implants |
| Vision | Eye exams, glasses, contact lenses, LASIK and other corrective surgery |
| Prescriptions | All prescription medications, insulin (even OTC) |
| Mental health | Therapy, psychiatry, inpatient mental health treatment, substance abuse treatment |
| Insurance premiums | After-tax premiums for health, dental, vision, Medicare Part B/D, Medigap, COBRA, long-term care (age-based limits) |
| Medical equipment | Wheelchairs, hearing aids, crutches, blood sugar monitors, CPAP machines, prosthetics |
| Transportation | Mileage to/from medical appointments (22¢ per mile in 2026), parking fees, tolls, ambulance costs, bus/train fare |
| Home modifications | Ramps, widened doorways, grab bars, and other modifications for medical necessity (deductible to the extent they exceed any increase in home value) |
| Long-term care | Nursing home expenses if the primary reason for residence is medical care; in-home nursing care |
| Other | Fertility treatments (IVF, egg freezing if medically necessary), childbirth classes, lead paint removal, special education for learning disabilities |
3. What does NOT qualify
These are frequently claimed but are not deductible:
| Expense | Why It’s Not Deductible |
|---|---|
| Cosmetic surgery | Not deductible unless it corrects a deformity from disease, accidental injury, or congenital abnormality |
| Gym memberships / fitness classes | Not deductible even if a doctor recommends exercise for a condition |
| Non-prescription vitamins & supplements | Not deductible unless prescribed by a doctor for a specific diagnosed condition |
| Over-the-counter medications | Aspirin, cold medicine, antacids, etc. are not deductible (except insulin) |
| Teeth whitening | Considered cosmetic, not medical |
| General wellness programs | Weight-loss programs are deductible only if prescribed for a specific disease (e.g., obesity, heart disease); general fitness is not |
| Employer-paid premiums | Premiums paid with pre-tax dollars are already tax-advantaged—no double benefit |
| HSA/FSA-reimbursed expenses | Already received a tax benefit through the account—no double deduction |
| Funeral and burial expenses | Not medical expenses |
| Childcare (non-medical) | Regular childcare is not medical; only childcare for a disabled dependent with medical needs may qualify |
4. How to calculate your deduction (step-by-step)
Here’s a worked example for a family of four with an AGI of $90,000:
Example: The Martinez family
Adjusted Gross Income (AGI): $90,000
Qualifying medical expenses paid in 2026:
- Out-of-pocket hospital bills (C-section delivery): $4,200
- Dental work (two crowns, braces for child): $5,800
- After-tax health insurance premiums: $3,600
- Prescription medications: $1,400
- Physical therapy co-pays: $960
- Medical mileage (800 miles × $0.22): $176
- New eyeglasses for two family members: $640
Total qualifying expenses: $16,776
7.5% of AGI: $90,000 × 0.075 = $6,750
Deductible amount: $16,776 − $6,750 = $10,026
At a 22% marginal tax rate, this deduction saves the Martinez family $2,206 in federal taxes.
Step-by-step instructions
- Gather all medical receipts, EOBs, and pharmacy records for the tax year.
- Add up every qualifying expense using the categories table above.
- Subtract reimbursements from insurance, HSA/FSA distributions, and any legal settlements for medical costs.
- Find your AGI on Line 11 of Form 1040.
- Multiply your AGI by 0.075 to find your threshold.
- Subtract the threshold from your total qualifying expenses. The result is your deduction.
- Enter the result on Schedule A, Line 4. Compare your total itemized deductions to the standard deduction—use whichever is higher.
5. Special situations
HSA and FSA interaction
Expenses paid with HSA, FSA, or HRA funds cannot be deducted because those accounts already provided a tax benefit. However, if your total medical expenses exceed what your HSA/FSA covers, the out-of-pocket portion may be deductible. For example, if you had $20,000 in medical expenses, paid $4,000 from your HSA, and $16,000 out of pocket, only the $16,000 counts toward the deduction. Learn more about HSA strategy in our HSA/FSA guide.
Health insurance premiums
You can deduct premiums you pay with after-tax dollars:
- Marketplace (ACA) premiums, minus any premium tax credit received
- COBRA continuation premiums
- Medicare Part B ($185.00/month in 2026) and Part D premiums
- Medigap/Medicare Supplement premiums
- Dental and vision insurance premiums (if paid after-tax)
You cannot deduct premiums paid through your employer’s pre-tax payroll deduction (those are already excluded from your W-2 income).
Long-term care insurance
Long-term care insurance premiums are deductible up to age-based limits set by the IRS each year. For 2026, the limits are approximately:
| Age at End of Tax Year | Maximum Deductible Premium |
|---|---|
| 40 or under | $480 |
| 41–50 | $900 |
| 51–60 | $1,790 |
| 61–70 | $4,770 |
| 71 or older | $5,960 |
Self-employed individuals
If you are self-employed (sole proprietor, LLC, or S-corp shareholder), you can deduct health insurance premiums as an above-the-line deduction on Line 17 of Schedule 1—even without itemizing. This is separate from and often more valuable than the Schedule A medical expense deduction. You cannot claim the same premiums on both.
6. Common mistakes that trigger IRS attention
Medical expense deductions are a known audit trigger when they appear disproportionately large. Avoid these mistakes:
a) Deducting expenses reimbursed by insurance or HSA
The IRS cross-references your medical deduction with the Form 1099-SA from your HSA and the data insurers report. If you deduct the gross amount of a hospital bill but insurance paid 80% of it, that’s a red flag. Only deduct the amount you paid out of pocket with after-tax money.
b) Claiming cosmetic procedures as medical
Rhinoplasty, Botox, liposuction, and teeth whitening are not deductible unless they correct a deformity from an accident, disease, or birth defect. “My doctor said it would improve my self-esteem” is not sufficient documentation for the IRS.
c) Missing the AGI threshold calculation
Some taxpayers forget to subtract the 7.5% AGI floor and deduct the full amount of their medical expenses. The IRS will catch this automatically during processing. Double-check your math on Schedule A, Line 4.
d) No documentation to support claims
The IRS can request proof of every expense. Claiming $15,000 in medical expenses without receipts, EOBs, or bank statements to back it up is a losing position in an audit. Keep everything (see recordkeeping section below).
e) Deducting expenses for non-dependents
You can only deduct expenses for yourself, your spouse, and qualifying dependents (or individuals who meet the dependent definition except for income or filing requirements). Paying for a friend’s surgery is not deductible.
7. Record-keeping best practices
The IRS recommends keeping medical expense records for at least 3 years after you file the return claiming the deduction (longer if you file late or amend). Here’s what to keep:
| Document | What It Proves | Where to Get It |
|---|---|---|
| Itemized bills | What services were provided and what was charged | Hospital/provider billing department |
| Explanation of Benefits (EOB) | What insurance paid vs. what you owe | Your insurance company portal |
| Pharmacy receipts | Prescription drug expenses | Pharmacy or insurance portal |
| Bank/credit card statements | Proof of payment with after-tax dollars | Your bank |
| Form 1099-SA | HSA/FSA distributions (to exclude from deduction) | Your HSA/FSA administrator |
| Mileage log | Medical travel expenses | You create this—date, destination, miles |
| Insurance premium statements | After-tax premium amounts | Your insurer or marketplace account |
| Doctor’s letters of medical necessity | That a contested expense was medically required | Your treating physician |
Real example: recovering $3,400 in tax savings
A 58-year-old teacher with an AGI of $72,000 had knee replacement surgery in 2025. Her out-of-pocket medical expenses totaled $19,200 (surgery co-pay $3,800, physical therapy $4,600, Medicare supplement premiums $3,200, prescriptions $2,100, dental implant $4,500, medical mileage $1,000). Her 7.5% threshold was $5,400. She deducted $13,800 ($19,200 − $5,400) on Schedule A. At a 22% tax rate, this saved her $3,036. She also discovered she had been overpaying for her knee replacement by $1,400 after scanning the bill with BillKarma—bringing her total savings to $4,436.
Frequently asked questions
What is the threshold for deducting medical expenses on taxes?
You can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI) for the 2026 tax year. You must itemize deductions on Schedule A to claim this. For example, with an AGI of $80,000, only expenses above $6,000 are deductible.
Can I deduct health insurance premiums as a medical expense?
Yes, if you pay them with after-tax dollars. This includes marketplace premiums (minus any premium tax credit), COBRA, Medicare Part B and D, Medigap, and long-term care insurance (subject to age-based limits). Premiums paid through your employer’s pre-tax payroll deduction are not deductible since they’re already excluded from taxable income.
Can I deduct medical expenses I paid with my HSA or FSA?
No. Expenses paid with HSA, FSA, or HRA funds cannot be deducted because those accounts already provided a tax benefit. Only the out-of-pocket portion paid with after-tax dollars counts. See our HSA/FSA guide for more details on using these accounts strategically.
What medical expenses are NOT tax deductible?
Non-deductible expenses include cosmetic surgery (unless correcting a deformity from disease or injury), gym memberships, non-prescription vitamins and supplements, over-the-counter medications (except insulin), teeth whitening, and general wellness programs. The expense must be primarily for diagnosis, treatment, or prevention of disease.
Does the medical expense deduction apply to family members?
Yes. You can deduct qualifying expenses paid for yourself, your spouse, and your dependents. You can also deduct expenses for someone who would qualify as a dependent except that they earned too much income or filed a joint return—such as an elderly parent you financially support. See IRS Publication 502 for the full rules on qualifying relatives.