Are Medical Expenses Tax Deductible?
Every year, medical costs can take a big bite out of your budget. But many taxpayers want to know, especially during the pandemic, if medical costs are tax deductible. If your insurance doesn’t cover all of your medical bills, you may be able to take a deduction for them to lower your tax bill. We’ll explain which medical costs are tax-deductible, if you’re eligible for this deduction, and how to get it.
Are medical expenses tax deductible?
As qualifying medical expenses, the IRS lets you deduct unreimbursed costs for preventive care, treatment, surgery, dental care, and eye care. You can also deduct the costs of going to a psychologist or psychiatrist that aren’t covered by insurance. Unreimbursed costs for prescription drugs and medical devices like glasses, contacts, dentures, and hearing aids are also tax-deductible.
The IRS also lets you deduct costs like gas, bus fare, and parking that you pay to get to a doctor or hospital.
How much can you deduct for medical costs?
The amount you can deduct for medical costs changes based on how much money you make. In 2022, if a taxpayer uses IRS Schedule A to itemize their deductions, they will be able to deduct all of their qualified unreimbursed medical care costs that are more than 7.5% of their adjusted gross income.
Your adjusted gross income (AGI) is your total taxable income from your tax return minus any changes to your income, like money you put into a traditional IRA or student loan interest that you can deduct.
For example, if your AGI is $45,000 and your medical expenses are $5,475, you would multiply $45,000 by 0.075 (7.5%) to find that you can only deduct expenses over $3,375. This means that you can deduct $2,100 in medical costs ($5,475 minus $3,375). You can write this amount down on Schedule A, Itemized Deductions.
The Tax Cuts and Jobs Act (TCJA) of 2017 nearly doubled the standard deduction from what it was in 2016. In 2022, the standard deduction for a single taxpayer is $12,950 and for a married couple filing jointly it is $25,900.
Most of the time, when you file your tax return, you can choose between the standard deduction and your itemized deductions. Most of the time, you would choose the one that gives you the biggest tax break. If your itemized deductions are less than the standard deduction, you probably won’t itemize, which means you won’t get medical expense deductions.
Are any medical costs related to the pandemic tax-deductible?
If you itemize, you can deduct unreimbursed COVID-19 medical and travel expenses. However, patients with certain health insurance plans may still have to pay deductibles or copayments. But many private health insurance companies have agreed to pay for all COVID-19 treatment costs, including any deductibles or copayments.
If you itemize, you can deduct unreimbursed COVID-19 medical and travel expenses.
Unreimbursed COVID-19 medical and travel expenditures are deductible if you itemize.
You can’t deduct insurance or employer-reimbursed medical expenses. Also, the IRS usually doesn’t let you claim costs for things like plastic surgery. You can’t usually deduct the cost of nonprescription drugs (except insulin) or other purchases for general health, like toothpaste, health club dues, vitamins, diet food, or nonprescription nicotine products. You can’t also write off medical bills you paid for in a different year. When we can have tax deduction medical expenses
Also, if you pay for your medical costs with money from a flexible spending account or health savings account, those costs aren’t tax-deductible because the money in those accounts is already tax-free.
Are there any qualified medical expenses related to the pandemic that are not tax-deductible?
No. Right now, all COVID-19-related medical costs that aren’t covered by insurance are tax deductible.
How do I get the tax deduction for medical costs?
To get the medical expense deduction, you have to list all of the deductions you are claiming. If you want to itemize, you can’t use the standard deduction. Usually, you should only claim the medical expenses deduction if your itemized deductions are higher than your standard deduction (TurboTax can also do this calculation for you). When we can have tax deduction medical expenses
If you choose to itemize, you must use IRS Form 1040 and add Schedule A to your tax return.
Include your annual medical bills on Schedule A’s line 1.
Adjusted gross income goes on Form 1040 line 2.
Line 3: 7.5% of adjusted gross revenue.
On line 4, write down the difference between what you spent and 7.5% of your adjusted gross income.
Include your annual medical bills on Schedule A’s line 1.
Adjusted gross income goes on Form 1040 line 2.
Line 3: 7.5% of adjusted gross revenue.
If this sum plus other itemized deductions is less than your standard deduction, you generally don’t need to itemize. When we can have tax deduction medical expenses
