The medical expense deduction lets you write off qualified healthcare costs that exceed 7.5% of your adjusted gross income (AGI). For most people this threshold is hard to clear, but in years with major medical events — surgery, serious illness, or expensive ongoing care — it can reduce your federal tax bill meaningfully.
The 7.5% AGI Threshold
You can only deduct medical expenses above 7.5% of your AGI. The IRS does not let you deduct the first 7.5% — it functions like a floor.
2026 Deduction Threshold by Income
| AGI | 7.5% Floor | Medical Expenses to Deduct All Above Floor |
|---|---|---|
| $40,000 | $3,000 | Any amount over $3,000 |
| $60,000 | $4,500 | Any amount over $4,500 |
| $80,000 | $6,000 | Any amount over $6,000 |
| $100,000 | $7,500 | Any amount over $7,500 |
| $150,000 | $11,250 | Any amount over $11,250 |
| $200,000 | $15,000 | Any amount over $15,000 |
Key point: Higher incomes make the deduction harder to reach. Someone earning $200,000 must spend more than $15,000 out of pocket before claiming a single dollar.
What Qualifies as a Deductible Medical Expense
Qualifying Expenses
| Category | Examples |
|---|---|
| Insurance premiums | Health, dental, vision, long-term care (limits apply), COBRA |
| Doctor and hospital care | Office visits, hospital stays, surgery, lab tests |
| Mental health | Psychiatrist, psychologist, therapist |
| Prescriptions | Prescription drugs, insulin |
| Vision and hearing | Eyeglasses, contacts, laser eye surgery, hearing aids |
| Dental | Preventive, fillings, orthodontics, dentures |
| Medical equipment | Wheelchair, crutches, CPAP, blood pressure monitor |
| Transportation | Miles driven to appointments (21¢/mile in 2026), parking, bus/taxi |
| Addiction treatment | Inpatient rehab, smoking cessation programs (prescribed) |
| Fertility and pregnancy | IVF, prenatal care, childbirth |
Non-Qualifying Expenses
| Category | Why It Doesn’t Qualify |
|---|---|
| Over-the-counter medications (non-prescribed) | Not a prescribed treatment |
| Vitamins and supplements | General health, not disease treatment |
| Cosmetic procedures | Elective unless correcting a deformity from accident/disease |
| Gym memberships | General health, not specifically prescribed for disease |
| Toothpaste, toiletries | Personal care |
| Non-prescription weight loss programs | Unless specifically treating obesity per physician |
| Funeral expenses | Not a medical expense |
Worked Example: Family With High Medical Bills
The Carter family files jointly with a combined AGI of $90,000. In 2026 they paid:
- Health insurance premiums (not employer-covered): $8,400/year
- Surgery co-pays and bills not covered by insurance: $4,200
- Prescription costs: $1,800
- Orthodontics for two children: $3,600
- Total qualified medical expenses: $18,000
AGI threshold: $90,000 × 7.5% = $6,750
Deductible amount: $18,000 − $6,750 = $11,250
At a 22% federal marginal rate, this deduction saves approximately $2,475 in federal taxes — but only if they itemize and their total itemized deductions exceed the $30,000 standard deduction for MFJ.
Their total itemized deductions: $11,250 (medical) + $10,000 (SALT cap) + $14,000 (mortgage interest) = $35,250. Since $35,250 > $30,000, itemizing saves them more than the standard deduction.
Long-Term Care Insurance Premiums
Long-term care (LTC) insurance premiums are deductible as medical expenses, but the IRS limits the deductible amount by age:
2026 LTC Premium Deduction Limits
| Age at End of Tax Year | Maximum Deductible Premium |
|---|---|
| 40 or younger | $470 |
| 41–50 | $880 |
| 51–60 | $1,760 |
| 61–70 | $4,710 |
| 71 or older | $5,880 |
These limits apply per person. A married couple can each deduct up to their age-based limit.
Health Insurance Premiums: Two Situations
If you buy your own insurance (marketplace, COBRA, or non-group): You can include these premiums in your Schedule A medical deductions.
If your employer pays part or all: Only the portion you pay with after-tax dollars is deductible. Premiums deducted pre-tax from your paycheck (through a Section 125 cafeteria plan) are already tax-free and cannot be deducted again.
If you’re self-employed: You likely qualify for the self-employed health insurance deduction (an above-the-line deduction you can take without itemizing). This is more valuable than the Schedule A deduction because it reduces your AGI directly. You generally cannot claim both for the same premiums.
How to Claim the Deduction
- Add up all qualifying medical expenses paid for yourself, spouse, and dependents during the year
- Subtract any reimbursements from insurance, HSA, or FSA
- Calculate your 7.5% floor (AGI × 0.075)
- Subtract the floor from your net medical costs
- Enter the result on Schedule A, Line 1–4
- Compare total itemized deductions to your standard deduction — claim whichever is larger
Keep records: Save Explanation of Benefits (EOB) statements, receipts, prescription records, and mileage logs throughout the year. The IRS can request documentation.
Timing Strategy: Bunch Medical Expenses
If you’re close to clearing the 7.5% threshold in a given year, consider bunching — scheduling elective procedures or filling prescriptions in that same tax year to push more expenses above the floor. In years when you expect to itemize anyway, this maximizes the deduction.
Medical expenses are deductible on Schedule A only above the 7.5% AGI floor — lowering your adjusted gross income (AGI) through retirement contributions or HSA deposits can make more of your medical expenses deductible. If you’re deciding between itemizing and the standard deduction, see itemized vs. standard deduction to determine which saves more in your situation.
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