The Basic Formula for Medical Expense Deductions

You can deduct medical expenses only if they exceed 7.5% of your adjusted gross income (AGI) for the tax year. That threshold is the key number that determines whether you get any refund at all from medical expenses.

Here is the actual calculation: add up all your may have access to medical expenses for the year, subtract 7.5% of your AGI, and the remainder is what you can deduct. If your medical expenses total $8,000 and your AGI is $60,000, then 7.5% of $60,000 is $4,500. You can deduct $8,000 minus $4,500, which equals $3,500 in medical expenses.

That $3,500 deduction reduces your taxable income. Whether it results in a refund depends on your total tax situation — your filing status, other deductions, and how much tax you already paid through withholding or estimated payments. A deduction is not the same as a refund; it lowers the income that gets taxed, but you only see money back if you overpaid your taxes overall.

Key Takeaways

  • Medical expenses must exceed 7.5% of your adjusted gross income before you can deduct any of them.
  • Only expenses paid out of your own pocket count — insurance premiums you paid, copays, deductibles, and procedures insurance did not cover.
  • You must itemize deductions on Schedule A to claim medical expenses; the standard deduction is usually larger and requires no tracking.
  • The IRS Form 1040 instructions and Publication 502 list exactly which expenses may have access to and which do not.
  • Medical expense deductions reduce your taxable income but do not automatically create a refund unless you overpaid taxes overall.

Which Medical Expenses Count Toward the Threshold

The IRS allows deductions for expenses you paid for diagnosis, cure, mitigation, treatment, or prevention of disease, or for treatment affecting any part or function of the body. That covers doctor visits, hospital stays, prescription medications, and dental work. It also includes medical equipment like wheelchairs, crutches, or hearing aids, and transportation to medical appointments.

Insurance premiums you paid out of pocket count — health insurance premiums for self-employed people, COBRA continuation coverage, and long-term care insurance. Copays and deductibles you paid also count. Eyeglasses, contact lenses, and vision correction surgery like LASIK are deductible. Mental health counseling and substance abuse treatment are deductible too.

Expenses that do not count include cosmetic surgery (unless it reconstructs an injury or birth defect), over-the-counter medications you buy without a prescription, vitamins and supplements, gym memberships, and weight loss programs. Teeth whitening is cosmetic and does not count. Maternity clothes do not count. If you are unsure whether a specific expense qualifies, the IRS Publication 502 has a detailed list, or you can ask a tax professional.

How to Gather and Organize Your Medical Expenses

Start by collecting receipts, invoices, and explanation of benefits (EOB) statements from your insurance company for every medical expense you paid during the tax year. Your insurance company sends EOBs showing what they paid and what you paid out of pocket — that out-of-pocket amount is what you deduct, not the full bill.

Create a spreadsheet or list organized by category: doctor visits, hospital, dental, prescriptions, medical equipment, insurance premiums, and transportation. Include the date, provider name, description of the service or item, and the amount you paid. Add up each category, then add all categories together to get your total medical expenses for the year.

Keep the actual receipts and EOBs in a folder. The IRS does not require you to attach them to your return, but you must have them if the IRS asks questions later. Many people photograph receipts or scan them into a folder on their computer so they do not lose paper copies.

Calculating Your Adjusted Gross Income (AGI)

Your AGI appears on line 11 of Form 1040 (the main federal tax form). It is your total income from all sources — wages, self-employment, interest, dividends, capital gains — minus certain deductions like contributions to a traditional IRA, student loan interest, or self-employment tax.

You do not calculate AGI yourself; it is the result of filling out your tax return. If you use tax software, it calculates AGI automatically. If you work with a tax professional, they provide it. Once you have your AGI, multiply it by 0.075 (which is 7.5%) to find the threshold you must exceed.

Example: if your AGI is $50,000, then 7.5% is $3,750. Your medical expenses must total more than $3,750 before you can deduct any of them. If they total $4,200, you can deduct $4,200 minus $3,750, which is $450.

Itemizing Deductions vs. Taking the Standard Deduction

Medical expense deductions only work if you itemize deductions on Schedule A of your tax return. Most people take the standard deduction instead, which is a flat amount based on filing status and age. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly (these amounts change each year).

If your total itemized deductions — medical expenses plus state and local taxes, mortgage interest, charitable donations, and other deductible items — add up to more than the standard deduction, then itemizing saves you money. If they add up to less, the standard deduction is better, and your medical expenses do not help you.

Many people with significant medical expenses in one year find that itemizing makes sense that year, but not in other years. You can itemize one year and take the standard deduction the next year; the choice is yours each tax year.

When Medical Expenses Result in an Actual Refund

A medical expense deduction lowers your taxable income, which lowers the tax you owe. You only see money back — a refund — if you paid more in taxes than you actually owe. That happens when your employer withholds too much from your paycheck, or you make estimated tax payments that turn out to be too high.

For example: you owe $5,000 in federal income tax for the year, but your employer withheld $6,500 from your paychecks. You are may have access to to a $1,500 refund. If you then deduct $3,500 in medical expenses, your taxable income drops and your actual tax owed becomes $4,200 instead of $5,000. Your refund increases to $2,300 because you still had $6,500 withheld but now owe only $4,200.

If you did not overpay taxes during the year, a medical expense deduction does not create a refund — it just reduces the amount you owe. The deduction is still valuable because it lowers your tax bill, but you will not see cash back.

Common Mistakes to Avoid When Calculating

Do not include insurance premiums your employer paid on your behalf. Only premiums you paid out of your own pocket count. Do not count the full medical bill if insurance paid part of it; count only your out-of-pocket share. Do not deduct expenses paid by a health savings account (HSA) or flexible spending account (FSA) — those accounts already gave you a tax break when you contributed the money.

Do not forget to check whether you actually benefit from itemizing. Many people calculate their medical deduction carefully but then discover the standard deduction is larger, so the medical deduction saves them nothing. Run both numbers before you file.

Do not round or estimate your expenses. Use actual receipts and statements. Do not include expenses from prior years or future years; only count what you paid during the tax year you are filing for. If you had a major surgery in December but did not pay the bill until January, that expense belongs on next year's return, not this year's.

Frequently Asked Questions

Does my spouse's medical expenses count if we file jointly?

Yes. If you file a joint return, you combine both spouses' medical expenses and use the joint AGI to calculate the 7.5% threshold. You do not calculate separate thresholds for each person. This often works in your favor because the combined medical expenses may exceed the threshold even if neither spouse's expenses alone would.

Can I deduct medical expenses for my adult child or parent?

You can deduct medical expenses you paid for someone else if they were your dependent for the tax year. The IRS has specific rules about what makes someone a dependent — generally, they must live with you, you must provide more than half their financial support, and their income must be below a certain limit. If your adult child or parent does not meet these tests, their medical expenses do not count on your return.

What if I paid medical expenses in installments or on a credit card?

You deduct the expense in the year you actually paid it, not the year you received the service. If you charged a procedure to a credit card in December, you deduct it in that year even if you did not pay the credit card bill until January. If you set up a payment plan and pay in installments over several years, you deduct each payment in the year you made it.

Do I need to report medical expenses to my insurance company?

No. Your insurance company does not need to know you are deducting medical expenses on your tax return. You report the expenses only to the IRS on your tax return. Keep your receipts and EOB statements for your records in case the IRS asks questions later.

What if my medical expenses were very high one year — can I carry them to another year?

No. Medical expenses must be deducted in the year you paid them. You cannot move them to a different year. However, if you had extremely high expenses in one year, that might be the year to itemize deductions even if you normally take the standard deduction. In other years, you go back to the standard deduction.