Medical, Dental Expenses and Tax Deductions
Medical Expenses &
The IRS allows you to deduct a certain amount of medical expenses if you itemize deductions. Qualified medical deductions are expenses you paid during the tax year for yourself, your spouse, or your dependents.
As of Jan. 1, 2019, you can only deduct the amount of the total un-reimbursed allowable medical care expenses for the 2019 tax year that exceeds 10% of your adjusted gross income. Let's say your AGI is $40,000 and your medical expenses are $5,000. As a result you could claim $1,000 on your tax return: $40,000 AGI * 10% = $4,000. Thus, $1,000 exceeds your $4,000 limit of your $5,000 medical expenses. For 2018 the limit was 7.5% or $40,000 * 7.5% = $3,000 or $2,000 in medical deductions. You can deduct medical expenses such medications, dental treatments, eye doctor visits, hospital fees and services. Below are details on medical expenses and medical savings account information.
List of Qualified Medical and Dental Expenses
Medical expenses are the costs associated with the diagnosis, cure, mitigation, treatment, or prevention of any disease recognized by the medical community (this includes Chiropractic practices and Christian Science), and the costs for treatments affecting any area or function of the body. Medical costs include the expenses of equipment, supplies, and diagnostic devices needed for the purposes listed above. They also include dental expenses.
Below is an alphabetical list of qualified medical deductions that might apply to you (more information on medical deductions). Please note that this list is not definitive or all-inclusive.
- abortion, acupuncture, addiction treatment, ambulance service, annual physical examination, artificial teeth, autoette
- bandage, blood sugar test kit, body scan, breast pumps, breast reconstruction surgery, birth control pills, Braille books and magazines
- capital expenses, car (special equipment), chiropractor, Christian Science practitioner, clinic costs, contact lenses, cosmetic surgery to correct a disfigurement, crutches
- dental treatments, dentist, diagnostic devices, diagnostic tests, disabled dependent care expenses, doctor visit, drug addiction treatment, drugs (when prescribed by a physician)
- eye doctor, eyeglasses, eye surgery (including laser)
- fertility enhancement, founder’s fees
- guide dog or other helper animal service
- health institute, health maintenance organization, hearing aids, home care, home improvements, hospital fees and services
- insulin, insulin treatments, insurance premiums, (care for the) intellectually or developmentally disabled
- laboratory fees, lactation supplies, lead-based paint removal, learning disability, legal fees, lifetime care, lodging while receiving medical care (up to $50 a person per night), long-term care
- meals, medical conferences, medical examinations, medical information plan, medical services, Medicare Part B supplemental costs, Medicare Part D premiums, medicines (when prescribed by a physician)
- nursing home, nursing services
- occupational therapy, operations, optometrist, organ donors, osteopath, oxygen
- physical examination, physical therapy, podiatrist, pregnancy tests and pregnancy test kit, prescription drugs and medicines, prosthesis, psychiatric care, psychoanalysis, psychologist
- reconstructive surgery
- special education, sterilization, stop-smoking programs and prescription drugs, surgery
- telephone, television, therapy, transplants, transportation**, trips, tuition (under special circumstances)
- vasectomy, vision correction surgery
- weight-loss program*, wheelchair, whirlpool baths (if ordered by a doctor), wig
*You may deduct expenses incurred for a weight loss program if that weight loss was conducted after the diagnosis of a specific illness by your doctor.
**You may deduct transportation expenses that are incurred primarily for medical reasons, e.g. bus fare to and from the hospital, gas consumed on your way to a medical facility. You may also include the cost of meals if they were purchased at a hospital, or similar institution, where you were staying for medical care.
High Deductible Health Plan and Health Savings Account
As of July 17, 2019 the IRS added the following chronic condition treatments to the list of preventive-care benefits for which a HDHP - High-Deductible-Health-Plan can pay. This applies also if your health care spending hasn't surpassed the plan deductible—without conflicting the rules allowing pretax contributions to Health Savings Accounts (HSA). If you as an employee are covered by an HDHP you may contribute to an HSA - with pre-tax dollars. In order to make HSA contributions with pretax dollars, an HDHP may not provide benefits for any year until the minimum deductible for that year is satisfied. However, HDHPs are not required to have a deductible for preventive care.
Congestive heart failure, diabetes, coronary artery disease
Angiotensin converting enzyme (ACE) inhibitors
Glucometer, Hemoglobin A1c testing, Insulin and other glucose-lowering agents, Retinopathy screening
Inhaled corticosteroids, Peak flow meter
Blood pressure monitor
Liver disease and/or bleeding disorders
International normalized ratio (INR) testing
Selective serotonin reuptake inhibitors (SSRIs)
Prevention, Medical Information Testing
Genetic tests by 23andMe
Tax payers can claim up to $117.74 of the $199 cost of a health-and-ancestry kit as medical care for tax purposes.
Health Insurance Premiums
Generally, medical care premiums can be included in your calculations of medical expenses. However, there are certain medical insurance premiums that you cannot include when calculating your medical expenses for tax purposes:
- Life insurance policies
- Insurance policies providing payment for loss of earning
- Insurance policies for loss of life, limb, sight, function, etc
- Insurance policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness or injury
- The part of your car insurance policy that provides medical insurance coverage for all persons injured in or by your car
- Health or long-term care insurance if the premiums were paid with tax-free distributions from a retirement plan made directly to the insurance provider without your intercession and these payments would have otherwise been included in your income.
If you are self-employed, you may be able to deduct 100% of the amount you pay for health insurance for yourself, your spouse, and dependents as an adjustment to income (a non-itemized deduction).
Be aware that the Affordable Care Act (Obamacare) also affects your tax return and health insurance premiums.
Limits on Medical Expense Deductions
For your 2018 return, you can deduct unreimbursed medical/dental expenses that are above 7.5% of your Adjusted Gross Income (AGI).
Your AGI is: $40,000
7.5% of your AGI is: $3,000
Your medical/dental expenses are: $5000
In this case, you could deduct $2,000 of your medical/dental expenses because $2,000 is the amount above 7.5% of your AGI ($3,000).
For medical expenses that would have been deductible in an earlier Tax Year, you can amend a tax return.
Expenses That Are NOT Qualified Medical Deductions
There are certain medical expenses that are not deductible. These expenses include:
- cosmetic surgery
- dance lessons, diaper service
- electrolysis or hair removal
- flexible spending account dollars, funeral expenses, future medical care
- hair transplant, health club dues, health savings account contributions, household help (except nursing help)
- illegal operations and treatments, insurance premiums
- maternity clothes, medical savings account, medicines and drugs from other countries
- nutritional supplements
- over-the-counter drugs and medicines (unless prescribed by a doctor)
- personal use items
- swimming lessons
- teeth whitening
- veterinary fees
You must subtract all reimbursements that you have received for medical or dental expenses from any source throughout the year from your calculation of total medical expenses.
If the cost of medical equipment or property was deducted from your taxes in a previous year and you sell that property in a later year for a profit you may have to record a capital gain. The taxable gain is the amount of the selling price more than the adjusted basis of the equipment or property.
Detailed information on medical and dental expense deductions.
Did you purchase health insurance through the Marketplace? You may qualify for the Premium Tax Credit, and details about Form 8962 - which you can use to help make health insurance affordable.
See what other tax deductions you may qualify to claim on your tax return.