Medical Expenses

A A A

DEFINITION

Any cost incurred in the prevention or treatment of injury or disease. Medical expenses include health and dental insurance premiums, doctor and hospital visits, co-pays, prescription and over-the-counter drugs, glasses and contacts, crutches and wheelchairs, to name a few. Medical expenses that are not reimbursed are deductible within certain limits (see below).


INVESTOPEDIA EXPLAINS

Taxpayers with access to group health insurance coverage are seldom able to deduct medical expenses that are not reimbursed on their taxes. Only those who itemize their deductions are eligible to claim any medical expenses on the Schedule A. Furthermore, only those expenses that exceed 7.5% of the taxpayer's adjusted gross income can be deducted.


RELATED TERMS
  1. Adjusted Gross Income - AGI

    A measure of income used to determine how much of your income is taxable. Adjusted ...
  2. Itemized Deduction

    A deduction from a taxpayer's taxable adjusted gross income that is made up ...
  3. Health Savings Account - HSA

    An account created for individuals who are covered under high-deductible health ...
  4. Archer MSA

    A savings account that earns tax deductible interest for medical expenses. Archer ...
  5. Medicare Doughnut Hole

    A range of total prescription drug spending in the Medicare Part D program where ...
  6. Medicare Advantage

    Hospital and medical insurance provided by private companies rather than the ...
  7. Essential Health Benefits

    A set of benefit requirements that must be included in certain health insurance ...
  8. Health Insurance Marketplace

    Organizations that facilitate structured and competitive markets for purchasing ...
  9. Health Plan Categories

    Four types of health insurance plans that are differentiated based on the average ...
  10. Preventive Services

    Routine health care that includes check-ups, patient counseling and screenings ...
Related Articles
  1. 9 Penalty-Free IRA Withdrawals
    Taxes

    9 Penalty-Free IRA Withdrawals

  2. Fighting The High Costs Of Healthcare
    Home & Auto

    Fighting The High Costs Of Healthcare

  3. Health-y Savings Accounts
    Retirement

    Health-y Savings Accounts

  4. Passing Boomers Will Leave A Big Economic ...
    Investing Basics

    Passing Boomers Will Leave A Big Economic ...

  5. The 5 Largest U.S. Product Liability ...
    Stock Analysis

    The 5 Largest U.S. Product Liability ...

  6. How An Advisor Can Help Cut Your Healthcare ...
    Investing News

    How An Advisor Can Help Cut Your Healthcare ...

  7. Can You Use a Healthcare Exchange After ...
    Insurance

    Can You Use a Healthcare Exchange After ...

  8. The Employee's Guide To Medicare
    Insurance

    The Employee's Guide To Medicare

  9. Medigap Vs. Medicare Advantage: Which ...
    Insurance

    Medigap Vs. Medicare Advantage: Which ...

  10. Medicare 101: Do You Need All 4 Parts?
    Retirement

    Medicare 101: Do You Need All 4 Parts?

comments powered by Disqus
Hot Definitions
  1. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  2. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  3. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  4. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
  5. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.
  6. Negative Carry

    A situation in which the cost of holding a security exceeds the yield earned. A negative carry situation is typically undesirable because it means the investor is losing money. An investor might, however, achieve a positive after-tax yield on a negative carry trade if the investment comes with tax advantages, as might be the case with a bond whose interest payments were nontaxable.
Trading Center