Are health care costs tax deductible?

by Christopher C. Humes, CPA | Jan 21, 2019

Are health care costs tax deductible?

It depends on your situation. Unreimbursed health care costs -- such as doctor, hospital, dentist, prescriptions, eyeglasses and the like -- are allowable as an itemized deduction. You can also include the cost of health care insurance premiums as medical expenses. All of these are tax deductible so long as they are not paid for on a pretax basis through an employer in a Section 125 cafeteria plan.

That said, these expenses are subject to limitations. First, these expenses need to exceed 7.5 percent of your adjusted gross income. For example, if your adjusted gross income for the year is $50,000, then your unreimbursed medical expenses need to exceed $3,750 for these expenses to be tax deductible. Next, your itemized deductions would need to be in an amount in excess of your new standard deduction. If you are single and under age 65, the standard deduction is $12,000 for 2018; the standard deduction for married couples is $24,000. Your medical expenses, along with state and local taxes (limited to $10,000 per year), mortgage interest, and your charitable contributions would need to exceed the standard deduction for your situation for you to receive a tax benefit from unreimbursed medical expenses. If all of your itemized deductions are less than the standard deduction for your filing situation, you should use the standard deduction.

If you would like further information, I recommend you can review the IRS’s instructions on its website. You may wish to consult with a qualified tax adviser/CPA in your area if you don’t already use one.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Christopher C. Humes, CPA, is with Baker Tilly Virchow Krause LLP in Wormleysburg, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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