Americans spend thousands of dollars on out-of-pocket medical and dental expenses each year, and with rising costs, many are looking for opportunities to lessen their burden come tax time. Thankfully, the IRS provides some relief in the form of a medical and dental expense deduction, but it comes with a catch. You must itemize your tax return to benefit from the medical and dental expense deduction. Read on to learn more.
Limitations on the Deduction
If you had significant medical and dental expenses last year, you may be wondering what items qualify for deductions on your tax return? The IRS allows a deduction for certain qualified medical and dental expenses paid during the year for taxpayers who itemize deductions on their tax return.
A few factors contribute to determining whether your medical expenses are deductible for tax purposes. Only those medical expenses not reimbursed by insurance or paid via tax advantaged accounts (Like Flexible Spending Accounts or Health Savings Accounts) qualify. And for those expenses that do qualify, only the aggregate total that exceeds 7.5% of your adjusted gross income (AGI) are deductible.
For example, if your 2025 AGI was $50,000, your eligible medical expenses during the year would have to exceed $3,750 to claim a deduction. Only the portion above the AGI floor would be deductible. If your qualifying medical expenses total $5,000 for the year, your potential deduction would $1,250.
Changes This Year
Due to changes under the Tax Cuts and Jobs Act (and made permanent by last year’s One Big Beautiful Bill Act (OBBBA)), many taxpayers no longer itemize. This is because your itemized deductions must surpass the standard deduction to be beneficial. The standard deductions for 2025 of $15,750 for Single and $31,500 Married Filing Jointly provide quite a high threshold to surpass for itemized deductions. Certain taxpayers may want to revisit this decision for 2025, though, as changes in tax law may make itemizing more appealing. Included in the OBBBA was a quadrupling of the state and local tax deduction limit. If your state and local taxes are significant enough, it may make the bar easier to reach with the medical expense deduction.
If you expect to itemize your deductions on your 2025 income tax return, now is a great time to review your medical expenses for the year to determine if you’ve had enough to exceed the 7.5% AGI floor. Those expenses include more than just hospital and doctor bills:
Transportation
The cost of travel to receive medical treatment is an eligible expense. This would include taxi fares, public transportation costs, or the costs of using your own vehicle. This is calculated at a rate of 21 cents per mile for medical miles driven in 2025, plus tolls and parking. As an alternative to the per mile rate, you can instead deduct certain actual vehicle related costs including gas and oil, but not general costs like insurance, depreciation, and maintenance.
Insurance Premiums
The cost of health insurance is a qualified medical expense. Even if your employer provides you with coverage, you may deduct the portion of the premiums you paid personally (as long as it wasn’t paid pretax out of your paycheck)
Long -term care insurance premiums also qualify, subject to dollar limits based on age. The 2025 limits are as follows:
- 40 and under: $480
- 41 to 50: $900
- 51 to 60: $1,800
- 61 to 70: $4,810
- Over 70: $6,020
Therapists, Nurses and Home Health Care
Services provided by individuals other than physicians can qualify if they directly relate to a medical condition and are not for general health reasons. For example, the cost of physical therapy after knee surgery qualifies. The cost of a personal trainer to help you get in shape doesn’t. Amounts paid for acupuncture, or a psychologist for medical care also qualify if related to a specific medical condition. In addition, certain long-term care services required by chronically ill individuals are eligible.
Eyeglasses, Hearing Aids, Dental Work and Prescriptions
The cost of glasses, contacts, hearing aids, dentures and most dental work qualify for deduction. While purely cosmetic expenses (such as teeth whitening) generally don’t qualify, certain medically necessary cosmetic surgery is deductible. Prescription drugs qualify, but nonprescription drugs such as aspirin do not, even if a physician recommends them.
Smoking-cessation, Alcoholism, and Drug Addiction Programs
Amounts paid to participate in a smoking-cessation programs, rehabilitation center costs and prescribed drugs designed to alleviate nicotine withdrawal are deductible expenses. Inpatient services like meals and boarding in these rehabilitation facilities, as well as transportation to Alcoholics Anonymous if included in your official treatment plan qualify as well. Non-prescription gum and certain nicotine patches do not qualify, however.
Weight-loss Programs
If taken as treatment for a disease diagnosed by a physician, a weight-loss program may qualify as a deductible expense. This could be obesity, diabetes, hypertension, or another disease for which a doctor directs you to lose weight. It is good practice to get a written diagnosis and track your expenses closely. Deductible expenses would include fees paid to join a weight-loss program and attend meetings, but foods for a weight-loss program are generally not deductible.
Dependents and Others
You may also deduct the medical expenses you pay for dependents, such as your children. If you pay for an individual, such as a parent or grandparent, who will qualify as your dependent except that he or she has too much gross income or files jointly, those expenses would be deductible too. In most cases, the medical expenses of a child of divorced parents can be claimed by the parent who pays them.
Determining if You Can Benefit
If after reviewing this list of eligible expenses you think you will exceed the 7.5% of AGI floor in 2025, we can help you determine if itemizing will provide you with the best benefit for your tax return. Please contact your Wegner Tax Advisor if you have questions about whether specific expenses qualify or for other tax breaks that you may be eligible for 2025.
