If you have faced high out-of-pocket medical costs this year, you may be wondering whether those costs can help reduce your tax bill. Good news, the IRS does offer some relief for those who qualify to itemize.

Who Can Deduct Medical Expenses?

You can only deduct out-of-pocket medical expenses if you itemize deductions using Schedule A instead of taking the standard deduction. If your total itemized expenses — like mortgage interest, property taxes, and medical costs — are higher than the standard deduction, itemizing may reduce your tax bill. Otherwise, medical expenses cannot be deducted.

How Much Can You Deduct?

You can only deduct the portion of your medical expenses that exceed 7.5% of your adjusted gross income (AGI).

If your AGI is $50,000, you can only deduct medical expenses that are more than $3,750. For example, if you spent $30,000 on medical costs, $26,250 ($30,000 less than the 7.5% threshold of $3,750) might be deductible.

What Medical Expenses Qualify?

The IRS allows deductions for many necessary medical expenses, including:

  • Doctor, dentist, and therapist fees
  • Hospital stays and surgeries
  • Prescription medications
  • Mental health services, including therapy
  • After-tax health insurance premiums
  • Medical equipment (e.g., wheelchairs, crutches, hearing aids, etc.)
  • Travel for medical care (mileage, lodging)


Please note cosmetic procedures, over the counter meds, vitamins, and wellness items usually are not deductible — unless prescribed for a diagnosed condition.

Documentation: Keep Good Records

Keep records like receipts and insurance statements just in case the IRS asks. Only claim what you can back up.

Final Thoughts

If your medical bills were especially high this year, speak with a KT tax professional about the possibility of itemizing. We can help you determine whether itemizing makes sense, calculate your deduction, and make sure you did not miss anything of note.