Nobody wants to qualify for the medical expense deduction.
It usually means you’ve had a year filled with unpleasant appointments, bewildering bills, and more time spent in a waiting room than you’d care to remember. It’s the tax break you earn through sheer misfortune.
But if you’ve weathered that storm, the IRS offers a small, complicated, but potentially valuable, consolation prize. It’s their way of saying, “That sounds rough. Here, let’s haggle over the details.”
The First, and Highest, Hurdle: The 7.5% Rule
Before you start dreaming of tax-deductible gold fillings, you must face the gatekeeper of this deduction: the 7.5 Percent of Adjusted Gross Income (AGI) rule.
It’s a concept so brilliantly simple and yet so maddeningly difficult to achieve, a committee of marathon runners must have designed it.
First, you must be willing to do the paperwork. This deduction is only available to those who itemize deductions on a Schedule A, foregoing the convenience of the standard deduction.
Second, you have to clear the bar. You can only deduct the amount of your unreimbursed medical expenses that is more than 7.5 percent of your AGI.
Think of it this way: If your AGI is $60,000, your personal hurdle is $4,500 ($60,000 x 0.075). You have to spend that much out-of-pocket before the IRS even starts counting.
If your total medical bills for the year were $5,000, you would get to deduct a mere $500 ($5,000 minus $4,500). It’s a tough club to get into.
So, What Counts? (The List Might Surprise You)
Once you clear that 7.5 percent hurdle, a whole world of expenses opens up. It’s not just the obvious stuff.
The Usual Suspects
- Payments to doctors, dentists, surgeons, chiropractors, and psychiatrists
- Hospital care and inpatient treatment
- Prescription medications and insulin
The “Wait, I Can Deduct That?” List
- Travel Costs: The mileage for trips to get medical care (at 21 cents a mile for 2025), plus bus fare and even parking fees.
- Treatment Programs: The cost of inpatient treatment for alcohol or drug addiction.
- Special Equipment: Eyeglasses, contact lenses, hearing aids, crutches, and wheelchairs.
- Home Improvements: The cost of installing a ramp, widening doorways, or modifying your home for medical accessibility can count.
- Menstrual Care Products: As of recently, these are now considered a medical expense.
And What Doesn’t Count? (The “Nice Try” List)
The IRS is not, sadly, going to subsidize your entire wellness journey. Things that are for your general, overall health don’t make the cut.
This includes:
- Cosmetic surgery (unless it’s reconstructive)
- Gym memberships
- Diet food (unless specifically prescribed by a doctor for an ailment)
- Non-prescription drugs (with a few exceptions)
- Vitamins or supplements for general health
Keep Every Single Receipt
The key to this whole enterprise is proof.
You need to keep meticulous records, such as bills, receipts, and canceled checks, for every expense you plan to claim.
You may not think you’ll hit the 7.5 percent threshold at the beginning of the year, but after one unexpected trip to the emergency room or a sudden need for a root canal, you might just find yourself clearing that bar.
And when you do, you’ll want every last receipt to make the pain just a little bit more profitable.
