Medical bills are among the expenses you can deduct from your taxable income if you itemize your deductions. You can deduct qualified medical expenses that exceed 7.5 percent of your adjusted gross income (AGI). If your AGI is $100,000, you can claim medical expenses greater than $7,500 as a deduction, for instance. Your AGI is the last line on the front page of your 1040 tax form.
You can claim a deduction for qualifying medical expenses you paid for yourself or for your spouse. If you're filing jointly, your spouse's medical expenses count too, but you'll also have a higher joint adjusted gross income. You can also include money you paid for a dependent child, dependent parents, siblings and a few other close relatives, in-laws or step-relatives. The cost of treating a deceased dependent or spouse, is also deductible, if you paid the bills.
Types of Expenses
Internal Revenue Service (IRS) Publication 502 includes a long list of tax-deductible medical expenses. These include prescription drugs; equipment such as a wheelchair or oxygen equipment; dental treatments; and eyeglasses. Drug addiction treatments and smoking cessation and weight loss programs may qualify for a deduction. If you, your spouse or a dependent is blind, you can deduct the cost of a seeing-eye dog and the portion of the cost of Braille books above the cost of a regular edition. If you treat your condition with osteopathy, Christian Science or acupuncture, those are all deductible.
The IRS also lists expenses that tax law won't allow you to deduct. You can't claim anything that promotes general health or fitness, rather than treating a specific problem, such as health club memberships, dance lessons or swimming lessons. Illegal treatments or operations aren't deductible, even if it's something such as medical marijuana that's approved at the state level. Cosmetic treatments—teeth whitening or weight loss to improve your appearance—aren't deductible, and neither are nonprescription drugs, except for insulin.
If you don't itemize, you can take the standard deduction instead. For 2012 taxes, for example, the basic deduction was $5,950, with an increased deduction if you're blind or over 65. If your medical deduction, combined with other deductions such as charitable donations and mortgage interest, don't add up to more than the standard, you're better off not itemizing. If you're close to exceeding the standard, see if there are any deductions you've missed that could put you over the top.