The medical expense deduction floor

How it works

Qualified costs include doctor and hospital bills, prescriptions, dental and vision care, health insurance premiums paid with after tax money, long term care premiums up to age based caps, mileage to appointments, and equipment such as hearing aids and wheelchairs. Costs paid for a spouse or a dependent count too. Only the total above this year's official medical expense floor percent (not yet verified here; see the official source below) percent of adjusted gross income is deductible, and only on the itemized schedule, so the deduction helps only when it pushes the itemized total past the standard deduction. Costs reimbursed by insurance or paid from a health savings account or flexible spending account do not count. Premiums paid through a workplace plan with pretax dollars are already excluded and cannot be counted again.

What it gives

A year with a major surgery, nursing home costs, or long term care premiums can produce a real deduction.

A wide list of costs qualifies, including travel to treatment and some home modifications.

Costs for a dependent parent count on the taxpayer's return.

What it costs, or where the catch is

The floor wipes out the deduction for most households in an ordinary year.

It only helps when itemizing beats the standard deduction.

Cosmetic procedures, vitamins, and gym fees do not count.

A worked example

June has adjusted gross income of $60,000 and a year of $14,000 in unreimbursed dental surgery and physical therapy. If the floor were 7.5 percent, the first $4,500 does not count, since $60,000 times 0.075 is $4,500, leaving $9,500 deductible. Combined with her other itemized items that pushes her past the standard deduction by $6,000, which at 22 percent saves her $1,320.

Where it goes wrong

The common miss is counting premiums that were already paid pretax through work, which the rules do not allow.

Who confirms it for you

For your own numbers, a CPA or enrolled agent. This page explains how the rule works for people in general; it does not know your situation and does not tell you what to do.

The official source

IRS Publication 502, Medical and Dental Expenses. Every figure that changes by year comes from the site's rules table, which the watcher checks against the official page on a schedule; where a figure is not yet verified, this page says so instead of printing a number.