😷 Schedule A: Medical Expenses

Continuing our review of Schedule A, we begin with one of the most common — and often misunderstood — deduction categories: medical expenses.

💊 Medical expenses and the AGI limitation

Schedule A allows medical expenses to be deducted, but not in full. Only the portion of expenses that exceeds 7.5% of AGI (Adjusted Gross Income) is deductible.

AGI is your gross income for the year after certain adjustments (such as retirement contributions, student loan interest, and other above-the-line deductions). The IRS uses AGI to determine many deduction limitations, including the limitation on medical expenses.

📍 Example:

If your AGI is $100,000, the deduction threshold is $7,500. This means that:

• medical expenses up to $7,500 are not deductible;

• only the amount above $7,500 may be claimed as a deduction.

🩺 Eligible expenses

Generally, deductible medical expenses are those directly related to the diagnosis, treatment, or prevention of disease, provided there is medical necessity and proper documentation.

🚫 Non-deductible expenses

The following expenses are not deductible, among others:

• cosmetic procedures not related to medical treatment

• expenses aimed at general wellness or appearance

• other costs that lack medical necessity

🔍 Conclusion

Medical expenses can significantly increase the itemized deduction, but only when expenses are high relative to AGI. The higher the AGI, the higher the threshold — and the harder it is to achieve a meaningful tax benefit from this Schedule A category.

➡️ In the next post, we will cover deductions for state and local taxes (SALT) and the related limitations.

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