What is Medical expense deduction?
In short
Individuals who itemize can deduct unreimbursed medical and dental expenses for themselves, their spouse and dependents to the extent the total exceeds 7.5% of adjusted gross income.
Key takeaways
- Deductible items include health insurance premiums paid with after-tax money, prescription drugs and travel for medical care.
- Cosmetic surgery and nonprescription drugs (other than insulin) aren't deductible.
- A medically required home improvement is deductible only to the extent its cost exceeds the increase in the home's value.
Example
Adjusted gross income of $80,000 and $9,000 of unreimbursed medical costs: the deduction is $9,000 − $6,000 = $3,000.
Where it's tested
REG: Individual Taxation: Adjustments & Deductions — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer has AGI of $100,000 and incurs $12,000 of unreimbursed qualified medical expenses. What amount is deductible as an itemized deduction?