Tax Resources

Medical Tax Deductions

The IRS has strict tax rules for medical tax deductions. There are allowable medical tax deductions and medical expenses that are not tax deductible. There are more allowable medical tax deductions if you itemize them on Schedule A of the IRS tax form 1040.

When are medical tax deductions allowed?

Medical tax deductions

Medical tax deductions are allowed by the IRS tax laws when the medical expenses cost you, your spouse, and your dependents more than 7.5% of your adjusted gross income (AGI).

Can I claim medical deductions on my income tax return?

You can only claim medical deductions on your income tax return if the medical expenses exceed 7.5% of your adjusted gross income. If you are married and filing jointly, the 7.5% floor limitation is applied to your joint adjusted gross income.

Calculating medical tax deductions, example

You can calculate how much medical tax deductions you can deduct in the following simple way. Suppose your adjusted gross income is $50,000 in 2007 and the medical expenses (including unreimbursed medical expenses) are $5,000. 7.5% of your income is $3,750. That means the amount of medical expenses that exceeds 7.5% of your AGI is ($5,000-$3,750 =) $1,250 which is the medical tax deduction you are allowed by the IRS.

Benefits of medical tax deductions

From the example above, your medical tax deductions are only a fraction of your total medical expense. It helps with the medical bills but not that much. Besides, not all medical expenses are allowable medical tax deductions.

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