Medical and Dental Expense Deductions
Tax relief for the high cost of medical care is limited. Medical expenses are deductible only if you itemize and only if these expenses exceed 7.5% of adjusted gross income (AGI). Medical expenses up to 7.5% of AGI are not deductible.
The list of expenses that qualify for the medical deduction is quite broad and includes:
- Equipment and supplies
- Insurance premiums (although self-employed individuals can deduct premiums from gross income and do not itemize them)
- Laboratory tests
- Medical treatments
- Prescription drugs
- Professional services
- Travel for medical treatment
If you have a high-deductible health plan that has certain minimum deductibles, you can make tax-deductible contributions to a health savings account (HSA). This deduction is subtracted from gross income; you do not have to itemize in order to claim it.
No deduction can be claimed for contributions you make to a flexible spending account sponsored by your employer.
Workers displaced from jobs by import competition may claim a refundable tax credit for health insurance premiums.
