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Lots of things qualify for the medical deduction, and that's a positive for taxpayers. Uncle Sam, however, has put some big barriers in the way for people who want to qualify to write off their health care costs. But if your medical bills are substantial, you still might be able to get a tax break from the IRS despite those barriers.
Let's start with the good news. Tax law takes a fairly expansive view about what qualify as medical expenses, assuming those expenses haven't been reimbursed by insurance. “Medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body,” according to the IRS. In practical terms, that includes non-reimbursed payments to doctors, dentists, surgeons and other medical professionals, including nontraditional medical practitioners, such as acupuncturists. You may also deduct:
- Hospital care and nursing care, if the availability of medical care is the principal reason for being in the nursing home, including the cost of meals and lodging charged by the hospital or nursing home.
- Prescription drugs, such as insulin.
- Payments for addiction or smoking cessation programs.
- Payments for weight-loss programs for specific diseases diagnosed by a physician.
- False teeth, reading or prescription glasses, contact lenses, hearing aids, crutches, wheelchairs, guide dogs or other service animals.
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For a full rundown of deductible expenses, see IRS Publication 502 (2022), “Medical and Dental Expenses.” You claim your itemized medical and dental deductions on Schedule A.
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Understand the 7.5 percent limit
Although many medical and dental expenses are deductible, there's a high bar to clear in order to qualify. You may deduct only the amount of your total unreimbursed medical expenses that exceed 7.5 percent of your adjusted gross income (the amount on Form 1040 or Form 1040-SR, line 8b).
Let's say your adjusted gross income is $40,000. In order to deduct your medical expenses, they must add up to more than $3,000 — 7.5 percent of $40,000. Furthermore, you can deduct only the amount that's above 7.5 percent of your adjusted gross income.
In this example, if you had AGI of $40,000 and $3,500 in unreimbursed medical deductions, you could deduct $500 worth of those expenses. Just keep in mind that in order to take any deduction at all, your total itemized deductions have to be worth more than the standard deduction. For the 2022 tax year, that's $12,950 for single filers, $25,900 for those married filing jointly and $19,400 for heads of household. The standard deduction is even higher if you're 65 or older.