Are Medical Expenses Tax Deductible?

In any year, medical expenses can eat into your budget. Many taxpayers are curious about whether medical expenses can be deducted from their tax bill, especially in the wake of the pandemic. If you have medical expenses that are not fully covered by your insurance you might be able to deduct them to lower your tax bill. If you are eligible, we'll show you how to claim this deduction.

Is it possible to deduct medical expenses?

You can deduct qualified medical expenses from unreimbursed costs for preventative, treatment and surgery. Unreimbursed expenses can be deducted for visits to psychiatrists and psychologists. You can also deduct unreimbursed prescription medication and appliances like glasses, contacts, false teeth, and hearing aids.

You can also deduct expenses you incur when you travel to receive medical care. This includes mileage, bus fare, and parking fees.

What is the maximum deduction for medical expenses?

Medical expenses tax deduction have a different deduction value depending on your income. The IRS will allow taxpayers to deduct their qualified unreimbursed medical expenses exceeding 7.5% of their adjusted gross earnings in 2022. If the taxpayer uses IRS Table A to itemize, they can do so.

Your adjusted Gross Income (AGI), is your total income subject of tax from your tax returns minus any adjustments to income such as contributions to a traditional IRA or deductible student loan interest.

If you have an AGI below $45,000 and $5,475 in medical expenses, then you multiply $45,000 by 0.0.075 (7.5%) to determine that expenses above $3,375 cannot be taken as an itemized deduction. You will get a medical expense deduction equal to $2,100 (5,475 less $3,375). This amount can be added to your Schedule A, Itemized deductions.

The standard deduction has almost doubled in 2017 as a result the Tax Cuts and Jobs Act of 2017. The standard deduction for 2022 is $12,950 for single taxpayers, and $25,900 for married taxpayers who file jointly.

You have two options when you file your tax returns. One is the standard deduction and the other is the itemized deduction. You would normally choose the one that provides the greatest deduction. You won't get medical expense deductions if your itemized deductions exceed the standard deduction.

TurboTax Tip - Normally, the medical expenses deduction should be claimed only if you have itemized deductions that exceed your standard deduction. TurboTax can do this calculation for your benefit.

Is it possible to deduct any medical expenses related to a pandemic?

Any COVID-19 treatment cost is exempt from tax as an itemized deduction, just like other unreimbursed medical expenses. While COVID-19 treatment should be covered by your health insurance, Medicare, and Medicaid, certain patients may still have to pay deductibles or copayments. Many private insurance companies will cover COVID-19 treatment costs. This includes any deductibles and copayments.

You can deduct any COVID-19-related medical treatment or travel expenses that you don't have to reimburse.

What medical expenses are not tax-deductible?

You can't deduct any medical expenses that you are reimbursed by your employer or insurance. The IRS generally prohibits the deduction of expenses for cosmetic procedures. The cost of nonprescription drugs (except for insulin) and other general health purchases, such as toothpaste, gym dues, vitamins, diet foods, and nonprescription nicotine products, can generally not be deducted. Also, you cannot deduct medical expenses incurred in another year.

You can also deduct medical expenses if the money is paid from a flexible spending account.

Is it possible to deduct qualified medical expenses incurred due to pandemics?

No. All unreimbursed medical expenses incurred due to COVID-19 at this time are tax-deductible.

How can I claim the tax deduction for medical expenses?

You must list your deductions in order to claim the medical expense deduction. You must itemize your deductions, not the standard deduction. You should claim the medical expense deduction only if you have itemized deductions that exceed your standard deduction. TurboTax can help you do this calculation. For more details to visit nationaltaxreports.com

To itemize, you will need IRS Form 1040. You must attach Schedule A to your taxes.

  • Schedule A: Report the total medical expenses and adjusted gross income from your Form 1040 on line 1.

  • On line 3, enter 7.5% of your adjusted net income.

  • On line 4, enter the difference between your expenses (and 7.5% of your adjusted net income).

  • To reduce your taxable income, add the amount shown on line 4 to any other itemized deductions.

  • You shouldn't itemize if this amount plus any other deductions you claim is lower than your standard deduction.

Remember that TurboTax will ask you basic questions about your life to help you complete all the necessary tax forms. TurboTax makes it easy to file your taxes correctly, regardless of your financial situation.