Smart Savings: What Health Costs Are Tax Deductible?

Healthcare can be one of the biggest personal or family expenses each year. The good news? Many of those costs may qualify for tax deductions, offering some financial relief at tax time—if you know where to look and how to claim them correctly.

Here’s a breakdown of how medical expense deductions work and what you can include.

Who Can Deduct Medical Expenses?

To qualify for a deduction on your federal tax return, your total qualified unreimbursed medical expenses must exceed 7.5% of your adjusted gross income (AGI). Only the amount over that threshold can be deducted if you itemize deductions on Schedule A (Form 1040).

That means if your AGI is $50,000, only expenses exceeding $3,750 may be deductible.

What Health Costs Are Deductible?

The IRS allows deductions for a wide range of medical expenses for yourself, your spouse, and your dependents. These include:

• Doctor, dental, and mental health visits

• Hospital care and surgeries

• Prescription medications

• Medical equipment and supplies (e.g., wheelchairs, crutches, CPAP machines)

• Health insurance premiums (in some cases, especially if you're self-employed)

• Long-term care insurance premiums (within IRS limits)

• Transportation for medical care (mileage, tolls, parking)

• Home modifications prescribed by a doctor for medical reasons (e.g., wheelchair ramps, support bars)

• Therapy and rehabilitation

• Hearing aids, glasses, and contact lenses

  
  

What’s Not Deductible?

Not everything related to health is deductible. These costs are generally not allowed:

• Cosmetic surgery not medically necessary

• Over-the-counter medications (unless prescribed)

• General health club dues or weight loss programs (unless for a diagnosed condition)

• Non-prescription vitamins or supplements

• Medical expenses reimbursed by insurance

  
  

Tips to Maximize Your Deduction

• Keep detailed records: Save receipts, invoices, and mileage logs for medical appointments.

• Track all out-of-pocket expenses, even smaller ones—they can add up.

• Use a Health Savings Account (HSA) if eligible, for tax-free savings on medical expenses.

• Consult a tax professional if you're close to the threshold or unsure what qualifies.

  
  

Final Thoughts

Tax deductions for medical expenses can be a valuable benefit, especially in years when your healthcare costs are unusually high. The key is to stay organized, understand what qualifies, and plan ahead. If you’re not sure whether your expenses meet the criteria, My Virtual CFO-ATL can help you navigate the rules and make the most of every dollar spent on your health.

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