In today’s world of rising healthcare costs, savvy financial planning can’t afford to ignore the IRS’s rules on tax-deductible medical expenses. If you’ve faced out-of-pocket health costs this year—from dental work and prescriptions to therapy or even a medically necessary wig—this blog is your roadmap to making those dollars work for you at tax time.
At JS Morlu, we help individuals and businesses optimize their tax position, and understanding how to legally deduct medical expenses is one of the most overlooked tools in your tax toolkit.
What Medical Expenses Are Deductible?
The IRS defines medical expenses as the costs of diagnosis, cure, treatment, or prevention of disease, including procedures that affect any part or function of the body. These can include traditional medical care, alternative therapies like acupuncture, mental health services, and even home modifications for disabled individuals.
But there’s a catch: you can only deduct expenses that exceed 7.5% of your Adjusted Gross Income (AGI)—and only if you itemize your deductions on Schedule A of Form 1040.
Example:
If your AGI is $100,000, the first $7,500 of qualified expenses doesn’t count. If you spent $10,000, only $2,500 is deductible.
And remember: only unreimbursed amounts count. If insurance covers the bulk of a $5,000 procedure and you pay $500 out-of-pocket, you can only deduct the $500.
Common Deductible Medical Expenses You Shouldn’t Overlook
Here’s a curated list of some medical expenses that are often deductible but frequently missed:
- Dental and Vision: Braces, extractions, cleanings, eyeglasses, contact lenses, and laser eye surgery.
- Alternative Treatments: Acupuncture and chiropractic care.
- Mental Health Services: Psychiatrists, psychologists, and therapy.
- Prescription Medications: Includes birth control, insulin, and doctor-prescribed smoking cessation drugs.
- Preventative Services: Annual physicals, diagnostic body scans, and pregnancy tests—even without a doctor’s recommendation.
- Medical Travel: Mileage (21 cents/mile for 2025), public transport, and up to $50 per night for lodging when traveling for care.
- Medical Equipment: Crutches, hearing aids, breast pumps, and even home modifications like wheelchair ramps.
- Long-Term and Assisted Care: Certain nursing services, home health aides, and even medically necessary meals in a care facility.
- Service Animals: Costs related to guide dogs for individuals with visual, hearing, or other physical disabilities.
What Doesn’t Qualify?
While the IRS is generous with what it allows, it draws a firm line at anything considered cosmetic, general wellness, or personal in nature:
- Gym memberships, even if recommended by a doctor.
- Cosmetic procedures (unless necessary for trauma or disease recovery).
- Over-the-counter vitamins and supplements (unless prescribed).
- Non-prescribed nicotine gum or patches.
- Expenses reimbursed by insurance or paid through an HSA/FSA.
Pro Tips to Maximize Your Deduction
- Track Everything: Save receipts, invoices, and notes from your doctor explaining why the expense was necessary. This documentation is crucial in the event of an audit.
- Bundle Expenses Strategically: If you’re close to the 7.5% AGI threshold, consider scheduling elective procedures or ordering prescription refills before year-end to maximize your deduction.
- Use a Spreadsheet: Document medical mileage, travel lodging, and expenses for dependents all in one place. You’d be surprised how quickly it adds up.
Can I Deduct for Others?
Yes. You can deduct medical expenses you paid for:
- Yourself
- Your spouse (even if separated)
- Any dependent you claim on your tax return
- A child under 27 for whom you pay insurance (even if not a dependent)
Special Circumstances That Also Qualify
There are some lesser-known but significant items the IRS greenlights:
- Fertility Treatments: Including IVF, sperm/egg storage, and donor-related costs.
- Gender Identity Treatments: Following a Tax Court ruling, these are deductible if medically necessary.
- Medical Conference Fees: If the conference relates to a dependent’s chronic illness (but not meals or lodging).
- Lead Paint Removal: If your child has lead poisoning and you need to remove paint from accessible surfaces in your home.
And Yes, COVID-Era PPE Qualifies Too
The IRS confirmed that personal protective equipment (PPE) like face masks, hand sanitizer, and disinfecting wipes can be deducted—so long as they were purchased primarily to prevent the spread of COVID-19.
What About Insurance Premiums?
Medical insurance premiums can be deductible—but only if they weren’t paid with pre-tax dollars through your employer.
If you’re self-employed, you can deduct 100% of your medical insurance premiums (including for your spouse and dependents) as an above-the-line deduction—which means you don’t even have to itemize.
Bottom Line: Plan It Like a Pro
At JS Morlu, we work with clients who are business owners, high-net-worth individuals, and healthcare providers—people for whom medical expense deductions can move the needle significantly on their tax liability. We help you identify opportunities, document expenses, and strategize deductions so you can keep more of your money.
And while the IRS rulebook isn’t exactly beach reading, knowing how to apply it could save you thousands.
Ready to optimize your deductions and reduce your tax burden?
📞 Contact us today for a free consultation and let’s review your year-to-date medical expenses before it’s too late to capitalize on them.