If you itemize​ your personal deductions at tax time instead of claiming the standard deduction, you can deduct medical expenses that total more than 10% of your adjusted gross income (7.5% of AGI if you’ll be at least 65 years old by year-end). Tally all your out-of-pocket medical costs and the portion over your threshold amount is deductible. What expenses qualify? You’d be surprised. 

The Basics

The tax law defines medical expenses as the costs for diagnosis, cure, mitigation, treatment or prevention of disease and for treatments affecting any part or function of the body. Obviously, this definition covers the costs for health insurance premiums, doctors, hospital stays, diagnostic testing, prescription drugs and medical devices (e.g., wheelchairs). The definition allows for a wide range of costs that may not fit neatly into any of these categories. (For more on tax deduction​s, read Last-Minute Tax Deduction Moves – Until April 15 and 7 Most Overlooked Tax Deductions.)

Less Usual Expenses Not to Overlook

  1. Acupuncture. This alternative medical treatment is deductible.
  2. Adaptive equipment. The cost of wheelchairs, bath chairs, bedside commodes and other items needed for a disability or condition is deductible.
  3. Costs for new babies. One example is breast pumps and other nursing supplies that assist lactation. Diapers are not tax-deductible, though. And usually, neither is the cost of baby formula, even if the baby has a milk allergy requiring special formula or the mother has had a mastectomy preventing her from nursing. However, if the formula requires a prescription, the cost in excess of the cost of nonprescription formula may be deductible (see “Special diets” below).
  4. Diabetes-related costs. Blood-testing kits, including blood strips and batteries, are deductible. So, too, is insulin even though it is not technically viewed as a prescription drug.
  5. Eyes and ears. The cost of eye exams, contact lenses, contact lens insurance and prescription glasses (including sunglasses) is deductible. So, too, is eye surgery (e.g., Lasix) to correct vision problems. Braille books are also deductible.  Similar to the case of vision issues, those with hearing issues can deduct the costs of exams and hearing aids (including batteries). 
  6. Home improvements. If you install improvements to accommodate a disability (e.g., wheelchair ramps, handrails in bathrooms – permanent changes to a home), the cost is fully deductible. However, the cost of special equipment in the home to address a health condition is deductible only to the extent it does not increase the value of a home. For example, putting in a swimming pool on doctor’s orders to treat an ailment is deductible only for costs over any increase in the home’s value.
  7. Lodging to receive medical treatment. If the treatment is out of town, a hotel/motel stay (but not meals) is deductible up to $50 per night. If a parent must accompany a minor child who is receiving treatment, the per-night dollar limit applies to both parent and child (i.e., $100 per night).
  8. Attending a medical conference. The cost of admission and transportation to a conference on a chronic condition that a taxpayer or his or her spouse or dependent suffers is deductible. However, meals and lodging expenses are not deductible.
  9. Organ transplants. Not only are the costs of the organ recipient deductible, the expenses for the donor (including testing, hospital stay, and transportation) are also deductible. It is illegal to pay for an organ donation.
  10. Personal attendant costs. For someone unable to manage the tasks of daily living (bathing, taking medications, toileting) themselves, the cost of someone to help is deductible. Generally, the deductible portion is limited to personal assistance with feeding, dressing, etc. and does not include the cost of housecleaning and handling mail. However, the cost of meals for a personal attendant may be deductible.
  11. Rehab treatment programs. The cost of in-patient and out-patient treatment programs for alcohol, drug addiction and other medical problems is deductible.
  12. Reproduction-related costs. This includes the cost of birth control pills, pregnancy test kits, abortions, vasectomies and fertility treatments (e.g., in vitro fertilization or surgery to reverse a vasectomy).
  13. Service animals. Deductible costs for a Seeing Eye dog and other service animals include not only their initial price tag, but also pet food, training costs and vet bills.
  14. Sex-reassignment surgery and hormone therapy to treat gender identity disorder (GID). Whether the cost of breast augmentation surgery is deductible is not clear, however. If it’s for cosmetic purposes, it would not be deductible.
  15. Smoking-cessation programs. These costs include doctor-prescribed treatments. However, over-the-counter gums, patches and other treatments are not deductible expenses.
  16. Special diets. Doctor-prescribed foods to treat a medical condition (e.g., celiac disease, obesity or hypertension) may be partially deductible. Only the cost of special foods that exceeds the cost for regular foods is deductible. This can be difficult to prove.
  17. Special education costs to address physical, mental or emotional conditions. For example, schooling to manage dyslexia is deductible.
  18. Travel costs to doctors, pharmacies, therapy sessions, etc. You can deduct the cost of cab fare or public transportation. If you use your personal vehicle, you can rely on an IRS-set mileage rate (23 cents per mile in 2015), but you must keep records of driving for medical purposes.
  19. Weight-loss programs for those who have a medical condition (including obesity). However, programs for maintaining general good health are not deductible.
  20. Wigs for cancer patients who lose their hair from chemotherapy.

The Bottom Line

If you incur any health-related expense that’s not covered by insurance or other reimbursement, determine whether it may be deductible. The best bet is to consult a tax advisor who can help.

 

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