Are Healthcare Costs Tax Deductible?

Medical debt is a serious threat to your finances and a leading cause of bankruptcy. As many as one-third of working-age adults in the U.S., or about 70 million people, are currently in debt because of medical or dental bills. So, if you have high healthcare costs, you may be wondering if your healthcare costs are tax deductible so you can save money at tax time.

Healthcare costs can be tax deductible, but it depends on the situation:

• Medical and dental expenses must be more than 7.5% of your Adjusted Gross Income (AGI) to be able to write them off.
• Your total itemized deductions (using IRS Schedule A) must exceed the IRS standard deduction amount for your filing status. The standard deduction has increased significantly in recent years, so most people don’t itemize anymore since the standard deduction is higher. (For example, the standard deduction in 2026 is $16,100 for a single person and $32,200 for a married couple filing jointly.

Before we get into more details about tax-deductible healthcare costs, here’s some important information and terms you should know.

Important Terms about Healthcare Expenses

Understanding if your or your family’s healthcare costs are tax deductible in your particular situation is useful if you need more money to pay medical debt or other bills — which most people do! “About 44% of Americans who have medical debt don’t know they can deduct healthcare expenses from their taxes,” according to LendingTree. By deducting some of your healthcare costs, IF you are eligible, you can save money on taxes and possibly get a larger refund.

Medical Expenses

Medical expenses are defined by the IRS as the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, to affect any part or function of the body. These expenses include payments for services rendered by licensed physicians, surgeons, dentists, and other medical practitioners to alleviate or prevent physical or mental disability or illness. They include the costs of equipment, supplies, diagnostic devices, and part of your transportation expenses incurred to receive care. But they do not include the money that your insurance or someone else pays on your behalf.

Many healthcare expenses are not covered by an ordinary health insurance plan you get at work or pay for yourself. For example, in Texas, adult vision care and dental care are not covered by primary health insurance plans, including those available through the Affordable Care Act marketplace. So qualifying medical expenses not covered by insurance at all or not paid by insurance if you haven’t reached your deductible might be eligible for a tax deduction.

Tax Deduction for Healthcare Costs

If you have healthcare expenses that are not paid by insurance, you may be able to deduct them from your taxes if you itemize and your qualified expenses exceed 7.5% of your adjusted gross income, as mentioned above.

Which expenses are tax deductible—as in which services or products—can also change annually. For example, the IRS made COVID-19 home test kits and personal protective equipment (PPE) tax deductible for 2021.

Adjusted Gross Income

Adjusted Gross Income (AGI) is your total income minus adjustments such as retirement account contributions or student loan interest. These adjustments decrease the amount of income taxes you owe. According to H&R Block, “AGI is the starting point for calculating your taxes and determining your eligibility for certain tax credits and deductions that you can use to help you lower your overall tax bill.”

Gross income—not to be confused with AGI—includes total monies received from all sources. This includes rent collected as income on property you own and the interest you get on your savings accounts. It also includes payouts you receive from some retirement accounts, alimony, and other benefits you may receive from your financial portfolio. 

One of the last things taxpayers do on their tax returns is calculate how much money they owe (or hopefully get back!) from the government each year. So, to determine what portion of your healthcare costs are tax deductible, you or your accountant must first determine your AGI.

Unreimbursed Medical Expenses

When you file your tax returns, if you are itemizing or seeing if you should itemize, you should include the amounts of your qualified medical expenses that were not paid by insurance. This could be either because you don’t have health and/or dental insurance, or because you do but you had a copayment or hadn’t reached your deductible. Officially, they’re known as unreimbursed medical expenses. 

Just make sure these amounts were not paid from your HSA or FSA, since that money is already not taxed, and the IRS doesn’t want you trying to write off the same amount twice.

Medical Expenses That Are Tax Deductible

There’s a very long list of medical expenses you can potentially deduct from your taxes. Fortunately, there’s an easy way to find out what’s on the list. Just go to IRS Publication 502 (we can’t recommend enough to bookmark this link as you prepare your tax returns).

In short, medical expenses qualify for potential write-off if they are unreimbursed and they diagnose, cure, mitigate, treat, or prevent disease. These can include things people may not always think about like prescription eyeglasses, mental health care, medical travel expenses (keep track of your bus fare or the mileage you drive to and from appointments), and capital expenses like a wheelchair ramp on your home.

Tax Deductible Medical Expenses

Here is a partial list — see IRS Publication 502 for many more:

• Acupuncture
• Drug and alcohol addiction treatment
• Transportation to a hospital by ambulance
• Artificial teeth
• Birth control pills and devices
• Diagnostic body scans
• Books and literature written in Braille
• Post-pregnancy breast pumps
• Non-cosmetic breast reduction surgery (as in the case of cancer treatment)
• Chiropractor
• Contact lenses 
• Crutches
• Eyeglasses, eye surgery, and contact lenses
• Guide dogs and service animals
• Special education
• X-rays
• Home care services

Non-deductible Medical Expenses

Healthcare expenses are deemed tax deductible when the service, medication, or device is necessary for alleviating or preventing physical and mental illnesses. Unfortunately, the government has a long list of devices, services, and supplements that are not considered necessary for general health. These are therefore not deductible.

These include examples such as:

• Vitamins
• Spas and gym memberships
• Devices like heating pads and ice packs
• Alternative therapies
• Cosmetic procedures
• Funeral costs
• Over-the-counter medications

So let’s get back to the original question: Are healthcare costs tax deductible? The answer is — some of them, some of the time! Here is the formula for determining which portions of your medical and dental bills you can and cannot deduct.

Formula for Deducting Healthcare Costs from Your Taxes

For example, suppose your family’s AGI is $75,000. That means that any funds you spent on qualified medical expenses above $5,625 can potentially be deducted. How did we come up with $5,625? When you have an AGI of $75,000, 7.5% of that comes out to $5,625. So you write that amount on the deduction line. You just have to make sure you have enough deductions to itemize them on your taxes. If the standard deduction is higher than your particular deductions (your medical expenses plus any other deductions such as property taxes), then you come out ahead taking the standard deduction and not itemizing.

There are lots of places online to find out how to fill out your tax return forms and to use electronic tax programs, or you can hire an accountant. Just be sure you save all of your receipts. No, really, save all of your medical and dental expense receipts, on paper or electronically. Your tax-preparer — even if it’s you — will need them if it turns out you can write off your excess medical expenses.

Other Ways to Deduct Health Expenses from Your Taxes

Using a Health Savings Account (HSA) with a high-deductible individual or group health insurance plan is another way to save money on medical expenses by making them tax-free. Money you save in an HSA is tax-deductible, and when you take it out to spend on qualified medical expenses, you also don’t have to pay taxes on it. Thus, your out-of-pocket healthcare expenses are tax-free, saving the percentage you would have paid on income taxes. See our HSA blog article for more information on this topic.

Need More Information on Health Coverage and Health Insurance?

If so, check out our book Decoding Health Insurance and the Alternatives: Options, Issues, and Tips for Saving Money for an incredibly comprehensive, easy-to-read guide to health insurance, related topics, and ways to save money. It can help you untangle the messy healthcare system and save money so you can avoid medical debt.

This is not to be taken as tax advice. Please consult an accountant, tax lawyer, or the IRS for issues, questions, and details.