Can I Deduct Medical Expenses in the USA? 2026 Threshold & Hidden Rules
The IRS only lets you deduct expenses above 7.5% of your AGI — here's how to actually qualify in 2026.
🔲 Reviewed by Michael Torres, CPA
The IRS only lets you deduct expenses above 7.5% of your AGI — here's how to actually qualify in 2026.
Maria Torres, a registered nurse from Los Angeles, CA, spent around $8,200 on medical costs last year between her son's braces, her own physical therapy, and a few specialist copays. She assumed she could deduct the whole amount on her taxes. Like many people, she was wrong. The IRS doesn't let you deduct every dollar you spend on healthcare — only the portion that exceeds 7.5% of your adjusted gross income (AGI). For Maria, that meant her deduction was roughly $2,200, not $8,200. This guide will walk you through exactly how the medical expense deduction works in 2026, what counts, what doesn't, and how to avoid the costly mistakes most taxpayers make.
According to the IRS, roughly 5% of taxpayers claim the medical expense deduction each year, and the average deduction is around $10,000. But with the standard deduction rising to $15,000 for single filers in 2026, fewer people will itemize at all. This guide covers three things: (1) the exact 7.5% AGI threshold and how to calculate it, (2) which expenses qualify and which are commonly missed, and (3) the 2026 rule changes that could affect your filing. Understanding these rules could save you hundreds — or thousands — on your tax bill this year.
Direct answer: You can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI) in 2026. For example, if your AGI is $60,000, only costs above $4,500 qualify (IRS, Publication 502, 2026).
In one sentence: Medical expense deduction = costs above 7.5% of your AGI.
The medical expense deduction is an itemized deduction on Schedule A of Form 1040. It's not a credit — it reduces your taxable income, not your tax bill dollar-for-dollar. In 2026, the threshold remains at 7.5% of AGI, a level that was made permanent by the Tax Cuts and Jobs Act (TCJA) of 2017. This means if your AGI is $80,000, you need at least $6,000 in qualified medical expenses before you can deduct a single dollar. Only the amount above that $6,000 threshold is deductible.
According to the IRS, Publication 502 (2026), qualified medical expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. This includes doctor visits, hospital stays, prescription drugs, dental care, vision care, and mental health services. It also includes transportation costs for medical care, long-term care services, and premiums for health insurance (if paid with after-tax dollars).
However, the deduction is only available if you itemize. In 2026, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly. If your total itemized deductions (including medical, state and local taxes, mortgage interest, and charitable contributions) are less than the standard deduction, you won't benefit from claiming medical expenses. This is the single biggest reason most taxpayers don't claim this deduction — their total itemized deductions don't exceed the standard deduction.
The IRS has a broad but specific list. Qualifying expenses include:
Many common health-related costs are not deductible. The IRS explicitly excludes:
Most taxpayers miss the deduction because they don't realize the 7.5% threshold applies to your entire AGI, not just your medical costs. If your AGI is $100,000, you need $7,500 in qualifying expenses before you see any benefit. A common mistake is forgetting to include transportation costs, insurance premiums, and dental work — these can easily push you over the threshold. I've seen clients save $1,200+ just by adding up all their mileage and parking receipts.
| Expense Category | Qualifies? | Notes for 2026 |
|---|---|---|
| Doctor copays | Yes | All licensed providers |
| Prescription drugs | Yes | Must be prescribed |
| Over-the-counter meds | No | Unless prescribed |
| Dental cleanings | Yes | Includes braces |
| LASIK surgery | Yes | Elective but qualifies |
| Gym membership | No | General health only |
| Health insurance premiums | Yes | After-tax only |
| Transportation mileage | Yes | 22 cents/mile in 2026 |
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One key point: the deduction is only available if you itemize. In 2026, with the standard deduction at $15,000, many taxpayers will find that itemizing doesn't pay off unless they have significant mortgage interest or state and local taxes. According to the Tax Policy Center, only about 10% of taxpayers itemize in 2026, down from 30% before the TCJA.
To check your eligibility, pull your AGI from your 2025 tax return (or estimate your 2026 AGI). Then add up all your qualifying medical expenses for the year. If the total exceeds 7.5% of your AGI, you may benefit from itemizing. Use the IRS's Publication 502 for the full list of qualifying expenses.
In short: You deduct only medical costs above 7.5% of your AGI, and only if you itemize — most taxpayers won't benefit in 2026.
Step by step: The process has 4 main steps: (1) calculate your AGI, (2) total all qualifying medical expenses, (3) subtract 7.5% of your AGI, and (4) compare total itemized deductions to the standard deduction. Expect to spend 2-3 hours gathering receipts and forms.
Step 1: Determine your adjusted gross income (AGI). Your AGI is your total income minus certain adjustments (like IRA contributions, student loan interest, and HSA contributions). You can find it on line 11 of your 2025 Form 1040. For 2026, estimate based on your current income and expected adjustments. If you're unsure, use your 2025 AGI as a baseline.
Step 2: Gather all medical expense receipts and records. This includes: doctor and dentist bills, hospital statements, prescription receipts, insurance premium statements (Form 1095-A, B, or C), mileage logs for medical travel, and receipts for medical equipment (like crutches, wheelchairs, or hearing aids). The IRS requires you to keep these records for at least 3 years after filing.
Step 3: Total your qualifying medical expenses. Add up everything from Step 2. Don't forget: transportation costs (22 cents per mile in 2026), parking fees, tolls, and lodging if you traveled for medical care (up to $50 per night per person). Also include health insurance premiums paid with after-tax dollars, long-term care insurance premiums (up to age-based limits), and dental/vision expenses.
Step 4: Calculate the deductible amount. Multiply your AGI by 0.075 (7.5%). Subtract that number from your total medical expenses. The result is your potential medical expense deduction. For example: AGI = $80,000; 7.5% = $6,000; total medical expenses = $10,000; deductible amount = $4,000.
Step 5: Compare itemized deductions to the standard deduction. Add your medical expense deduction to all other itemized deductions (state and local taxes up to $10,000, mortgage interest, charitable contributions). If the total exceeds the standard deduction ($15,000 single / $30,000 married filing jointly in 2026), itemizing saves you money. If not, take the standard deduction.
Many taxpayers forget to include expenses that were reimbursed by insurance or an HSA. You can only deduct expenses you paid out-of-pocket. If your insurance reimbursed you later, that amount is not deductible. Also, if you used pre-tax dollars from an HSA or FSA, those expenses are already tax-free and cannot be deducted again. I've seen clients double-claim and trigger an IRS audit — not worth the risk.
If you have a Health Savings Account (HSA) or Flexible Spending Account (FSA), you cannot deduct expenses paid with those funds. The IRS considers those expenses already tax-free. However, you can deduct expenses that exceed your HSA/FSA balance or that you paid with after-tax dollars. For example, if your HSA covers $3,000 of a $5,000 surgery, you can deduct the remaining $2,000 (subject to the 7.5% threshold).
Long-term care insurance premiums are deductible as medical expenses, but only up to certain age-based limits set by the IRS. For 2026, the limits are approximately: age 40 or under: $470; age 41-50: $880; age 51-60: $1,760; age 61-70: $4,710; age 71+: $5,880. These amounts are adjusted annually for inflation. Check IRS Publication 502 for the exact 2026 figures.
Yes. You can deduct medical expenses you paid for yourself, your spouse, and your dependents. A dependent must meet the IRS definition: they must have lived with you for the full year (or be a relative), and you must have provided more than half of their financial support. This includes adult children, elderly parents, and other qualifying relatives. The expenses must be paid by you, not by the dependent.
Step 1 — Aggregate: Collect every medical receipt, statement, and log for the entire year. Include everything from copays to mileage.
Step 2 — Gauge: Calculate 7.5% of your AGI. This is your threshold. Subtract it from your total medical expenses.
Step 3 — Itemize: Compare your total itemized deductions (including medical) to the standard deduction. Only itemize if it's higher.
| Scenario | AGI | Medical Expenses | Threshold (7.5%) | Deductible Amount |
|---|---|---|---|---|
| Single, no dependents | $50,000 | $6,000 | $3,750 | $2,250 |
| Married, 2 kids | $100,000 | $12,000 | $7,500 | $4,500 |
| Self-employed, high medical | $80,000 | $15,000 | $6,000 | $9,000 |
| Retiree, high premiums | $60,000 | $10,000 | $4,500 | $5,500 |
| Low income, high costs | $30,000 | $8,000 | $2,250 | $5,750 |
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Your next step: Download IRS Publication 502 from irs.gov and start gathering your 2026 medical receipts. Use a spreadsheet to track expenses by category.
In short: Calculate your AGI, total medical expenses, subtract 7.5%, then compare itemized vs. standard deduction — only itemize if it saves you money.
Most people miss: The biggest hidden cost is the opportunity cost of itemizing — if your total itemized deductions are only slightly above the standard deduction, you might save a small amount but lose the simplicity of the standard deduction. Also, the IRS audits medical deductions at a higher rate than other itemized deductions (IRS, Data Book 2025).
Risk 1: The 7.5% threshold is a hard floor. If your medical expenses are $5,000 and your AGI is $60,000, you get zero deduction because $5,000 is below $4,500 (7.5% of $60k). Many taxpayers assume they can deduct the full amount, but the IRS only allows the excess. This is the #1 reason people overestimate their deduction.
Risk 2: Itemizing may not pay off. In 2026, the standard deduction is $15,000 for single filers. If your total itemized deductions (medical + state and local taxes + mortgage interest + charity) are only $16,000, you save just $1,000 in taxable income — which at a 22% tax rate is only $220 in actual tax savings. Is it worth the hours of paperwork? For many, the answer is no.
Risk 3: The IRS scrutinizes medical deductions. According to the IRS Data Book, medical expense deductions are audited at a rate of about 1.5%, compared to 0.6% for all returns. The IRS looks for inflated mileage claims, non-qualifying expenses (like gym memberships), and double-dipping with HSA/FSA funds. Keep meticulous records.
Risk 4: State tax treatment varies. Some states conform to federal rules, but others have different thresholds or don't allow the deduction at all. For example, California does not allow a medical expense deduction on state returns (it conforms to federal but with a higher threshold). New York allows it but with a 4% AGI floor. Check your state's rules before filing.
Risk 5: The deduction is not refundable. Unlike a tax credit, a deduction only reduces your taxable income. If your total deductions exceed your income, you can't get a refund for the excess. This is especially important for low-income taxpayers who might have high medical costs but little taxable income.
If you're close to the 7.5% threshold but not quite there, consider 'bunching' — shifting non-urgent medical expenses into a single year to exceed the threshold. For example, schedule elective surgery, buy new glasses, or stock up on prescription drugs in December instead of January. If you can bunch two years' worth of expenses into one year, you might itemize that year and take the standard deduction the next. This strategy can save $500-$1,000 in taxes over two years.
If the IRS audits your medical deduction, they will ask for receipts, canceled checks, and mileage logs. You need to prove each expense was for medical care, was not reimbursed, and was paid in the tax year you're claiming. The IRS also checks that the provider was licensed. If you can't produce records, the deduction will be disallowed, and you may owe back taxes plus penalties and interest.
Yes, but only if you paid the expenses and the person was your dependent at the time of death. You can deduct expenses paid within one year of the person's death. This is a common area of confusion — many taxpayers try to deduct funeral expenses, which are not deductible.
In one sentence: The biggest risk is overestimating your deduction and getting audited.
| Risk | Cost to You | How to Avoid |
|---|---|---|
| Overestimating deduction | Audit + back taxes | Use IRS Publication 502 |
| Itemizing when not worth it | Wasted time, small savings | Compare to standard deduction |
| Missing state rules | State audit | Check state tax agency website |
| Double-claiming HSA/FSA | Disallowed deduction + penalty | Track HSA/FSA reimbursements |
| Not keeping records | Audit loss | Save receipts for 3+ years |
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In short: The medical deduction is risky — you need records, you may not save much, and the IRS audits it more often than other deductions.
Verdict: The medical expense deduction is worth pursuing if (a) your qualifying expenses exceed 7.5% of your AGI by a significant margin, and (b) your total itemized deductions exceed the standard deduction. For most taxpayers, it's not worth the paperwork.
| Feature | Medical Expense Deduction | Standard Deduction |
|---|---|---|
| Control | Requires receipts and records | No documentation needed |
| Setup time | 2-3 hours gathering receipts | 0 minutes |
| Best for | High medical costs, low AGI | Most taxpayers |
| Flexibility | Can bunch expenses | Fixed amount |
| Effort level | High | None |
✅ Best for: Retirees with high medical premiums and low AGI; self-employed individuals with high out-of-pocket costs; families with a major medical event (surgery, chronic illness).
❌ Not ideal for: Most wage earners with employer-sponsored insurance; anyone whose total itemized deductions are close to the standard deduction; taxpayers in states that don't allow the deduction.
Scenario 1: Retiree with $50,000 AGI and $12,000 in medical expenses. Threshold = $3,750. Deductible = $8,250. If they itemize and have $5,000 in other deductions, total itemized = $13,250. Standard deduction (single) = $15,000. They're better off taking the standard deduction. No benefit from medical expenses.
Scenario 2: Self-employed with $80,000 AGI and $20,000 in medical expenses. Threshold = $6,000. Deductible = $14,000. Other deductions = $8,000. Total itemized = $22,000. Standard deduction (single) = $15,000. They save $7,000 in taxable income — worth about $1,540 at 22% tax rate.
Scenario 3: Family of 4 with $100,000 AGI and $10,000 in medical expenses. Threshold = $7,500. Deductible = $2,500. Other deductions = $12,000 (mortgage interest + state taxes). Total itemized = $14,500. Standard deduction (married) = $30,000. No benefit — they take the standard deduction.
Honestly, most people don't need to worry about the medical expense deduction. The standard deduction is so high in 2026 that only about 10% of taxpayers itemize. Unless you have a major medical event or are a retiree with high premiums, you're probably better off taking the standard deduction and moving on. But if you do qualify, the savings can be significant — up to $2,000 or more for those with very high costs.
Your next step: Use the IRS's Interactive Tax Assistant to check your eligibility. Then decide if itemizing is worth the effort.
In short: The medical expense deduction is a niche tool — it helps retirees and the self-employed, but most taxpayers should stick with the standard deduction.
No. You must itemize deductions on Schedule A to claim medical expenses. If you take the standard deduction, you cannot deduct any medical costs. In 2026, the standard deduction is $15,000 for single filers, so most taxpayers won't itemize.
It saves you your marginal tax rate times the deductible amount. For example, if you have $4,000 in deductible medical expenses and a 22% tax rate, you save $880. The average deduction is around $10,000, saving roughly $2,200 for someone in the 22% bracket.
It depends. You cannot deduct expenses paid with HSA funds. But if your out-of-pocket costs exceed your HSA balance, you can deduct the excess (subject to the 7.5% threshold). Track both HSA and non-HSA expenses separately.
The IRS will ask for receipts, canceled checks, and mileage logs. If you can't provide them, the deduction is disallowed. You'll owe back taxes plus penalties and interest. Keep records for at least 3 years after filing.
No. An HSA is almost always better because it's a triple tax advantage: contributions are pre-tax, growth is tax-free, and withdrawals for medical expenses are tax-free. The medical expense deduction only reduces taxable income and is subject to the 7.5% threshold.
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