Deducting medical and dental expenses on your taxes

Deducting medical and dental expenses on your taxes

In the U.S., medical and dental expenses can add up quickly. We all want the best for ourselves and our families, and even with insurance, it may seem like you’re still paying a lot. The silver lining here is that the IRS allows you to deduct certain qualified medical and dental expenses to help potentially lower your tax bill. Continue reading to find out more about standard versus itemized deductions, what medical expenses qualify for deduction, what dental expenses qualify for deduction, and more.

What’s the threshold for itemizing medical expenses?

You can deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). For example, if you have an AGI of $50,000 and $10,000 in total deductible medical expenses, 7.5% of $50,000 is $3,750 and is not deductible. You can deduct $6,250 of medical expenses as part of your itemized deductions.

Standard versus itemized deductions

Before we go into detail about medical and dental deductions, let’s take a step back and decide if standard or itemized deductions are right for you and your family. A deduction is a specific dollar amount that reduces the amount of income on which you’re taxed.

If you take what the IRS calls the “standard deduction,” that means you’ll take a set amount as a deduction off your income, to help lower your taxes. Your standard deduction amount depends on your filing status, whether you’re 65 or older, are blind, and whether another taxpayer can claim you as a dependent. There are some circumstances where the taxpayer may not claim the standard deduction—if you’re married filing separately and your spouse itemizes deductions or if you’re a nonresident alien. In this case, you cannot itemize your medical and dental expenses.

On the other hand, itemized deductions are certain expenses the IRS allows you to deduct from your income to determine your taxable income. The more deductions you claim, the lower your taxes for the year will be. You could even get a bigger refund.

If you choose to itemize your deductions, you may be able to deduct some of your medical and dental expenses. There are specific circumstances and limits when itemizing medical and dental deductions, which we’ll explore in this article.

Since everyone’s situation is different, a tax professional can help you with deciding whether to itemize or take the standard deduction. But the general rule is easy—you get to pick the bigger of the two: Either the standard deduction that all taxpayers are entitled to, or itemized deductions, if larger.

Which medical expenses are tax deductible?

As mentioned above, you can deduct medical expenses that exceed 7.5% of your AGI. The IRS defines medical expenses as the costs of diagnosis, cure, mitigation, treatment or prevention of disease, and the costs for treatments affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They also include the costs of equipment, supplies, and diagnostic devices.

What’s more, medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation.

Deductible expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract.

In addition, the expenses must be legal in the U.S. and for yourself, your spouse or a dependent, or a family member that would be a dependent but they either make more than the minimum taxable income or they are the dependent of the other parent or a relative.

Some examples of medical expenses include (but are not limited to):

• Medical Copays. Payments to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and other medical practitioners for preventative care, surgery, dental or vision care, x-rays, lab fees, and more
• Prescriptions. Including insulin.
• Medical devices. Such as hearing aids and batteries, dentures, wheelchairs, crutches, etc.
• Treatment facility costs. including addiction services
• In-hospital care. Including lodging and meals
• In-home health care and visiting health professionals
• Dental expenses. Including braces and dentures
• Eye care costs. Including exams, prescription glasses, and contact lenses and associated cleaning supplies
• Acupuncture
• Weight loss programs. For doctor-diagnosed diseases

There are other qualified medical expenses to consider. Work with a tax professional about your specific situation.

Which medical expenses are not tax deductible?

As always, you should work with your tax professional about your expenses for the year. In general, examples of medical expenses that do not qualify for tax deductions include:

• Any medical expenses for which you are reimbursed by either insurance or employer
• Cosmetic or elective surgeries
• Non-prescription/over-the-counter medications, vitamins, toiletries, cosmetics, nicotine gum, etc.
• Funerals/burial services
• Medical expenses in a foreign country that are not legal in the U.S.
• Medical expenses paid in another tax year

Do I need receipts to deduct medical expenses?

It’s important to keep all your receipts, either in paper form or electronically. If you are paying for dental and medical expenses with a credit card, you can also separate all your expenses to tally up your year-end total. Always ask for an itemized receipt from your health provider’s office and bring all the receipts to your appointment with your tax professional to break down what is or isn’t a qualified medical or dental expense.

Which dental expenses are tax deductible?

Broadly speaking, you can deduct the costs of routine dental checkups, medication, oral surgeries, and treatments. Travel and transportation costs to reach your dental facility may also be considered deductible. But all expenses need to be medically necessary to be tax deductible. Make sure you keep the receipts and have your dentist or oral surgeon give you an itemized receipt of all the procedures that they did.

What is the medical deduction rate?

Medical and dental expenses can add up quickly. The good news is that the IRS allows taxpayers to deduct the qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their AGI.

If you have an AGI of $50,000 and $10,000 in total deductible medical expenses, 7.5% of $50,000 is $3,750 that is not deductible. You can deduct $6,250 of medical expenses as part of your itemized deductions.

Before you try to deduct your medical and dental expenses, make sure the total of all your itemized deductions exceeds the standard deduction for the taxpayer’s filing status. If your itemized deductions add up to less than your standard deduction, it may not make sense to itemize, because your standard deduction will take off more from your income and lower your tax bill.

How do I claim medical expenses on my taxes?

To claim the medical expense deduction, you must itemize deductions rather than take the standard deduction. You should only do this if your itemized deductions are greater than your standard deduction, as we mentioned above.

To itemize you’ll need to fill out IRS Form 1040 and attach Schedule A, Itemized Deductions, to calculate your deduction. You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your AGI shown on Form 1040.

More questions about deducting dental and medical expenses? Find a local Jackson Hewitt Tax Pro near you today. We are here year-round to answer and look forward to working with you this coming tax year and for many years to come.
You may also file from home, the break room, or even on the go with Tax Pro To Go. Just chat with a live agent to schedule a call with your Tax Pro, upload your tax docs, finish your taxes over the phone, and e-sign. It’s that simple! 

About the Author

Mark Steber is Senior Vice President and Chief Tax Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

More about Mark Steber Our Editorial Policy