Medical expenses are deductible under IRC §213 only to the extent they exceed 7.5% of adjusted gross income. For a taxpayer with $100,000 of AGI, the first $7,500 of medical expenses produces no deduction at all. Only the excess above $7,500 is deductible as an itemized deduction. Given the elevated standard deduction ($15,000 single / $30,000 MFJ for 2026), the medical expense deduction is useful primarily for taxpayers with very high medical costs, very low income, or those who can strategically time and bundle expenses to clear both the 7.5% threshold and the standard deduction in a single year.
Formula: Deductible medical expenses = total qualifying medical expenses - (AGI x 7.5%). Only the excess is deductible, and only if you itemize.
Example: AGI of $80,000, medical expenses of $12,000. Threshold = $6,000 (7.5% x $80,000). Deductible excess = $6,000. But this must then exceed the standard deduction to produce any benefit.
The permanent 7.5% floor: OBBBA made the 7.5% AGI threshold permanent. It had been scheduled to increase to 10% multiple times but Congress kept extending the 7.5% rate. It is now permanently fixed at 7.5%.
Under IRC §213(d), medical care means amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. Qualifying expenses include: physician and dentist fees, hospital costs, prescription medications, medical equipment and devices, hearing aids, eyeglasses and contact lenses, psychiatric and psychological treatment, substance abuse treatment, and medically necessary home modifications (widened doorways, grab bars, ramps - but only the cost above any home value increase).
Expenses that do not qualify: cosmetic surgery that is not medically necessary, teeth whitening, gym memberships (even doctor-recommended for general health), maternity clothes, funeral expenses, over-the-counter medicines not prescribed by a physician (though HSAs can reimburse many OTC items), and health club dues. The line between medical and personal is often fuzzy and fact-dependent.
Because the medical expense deduction requires clearing both the 7.5% AGI threshold and the standard deduction, many taxpayers receive no benefit from medical expenses in years when their costs are spread out. The bunching strategy concentrates medical expenses in alternating years: pay 2025 and 2026 dental work in 2025, schedule elective procedures in 2025, prepay prescription refills in December 2025 - then take the standard deduction in 2026. In the bunched year, the large medical total plus other itemized deductions (state taxes, mortgage interest) may exceed the standard deduction, producing a real tax benefit. In the non-bunched year, take the standard deduction.
Expenses reimbursed by an HSA (Health Savings Account) cannot also be deducted under §213. HSA distributions for qualified medical expenses are tax-free. If the same expense were also deducted under §213, the taxpayer would get a double benefit that the Code does not allow. Only out-of-pocket unreimbursed expenses - those not paid by insurance and not reimbursed from an HSA, FSA, or HRA - are eligible for the §213 deduction.
Taxpayers who drive to medical appointments may deduct the medical mileage rate for those miles. For 2026, the IRS medical mileage rate is 21 cents per mile (verify - this rate changes annually and is lower than the business rate of 70 cents). Actual expenses (gas, oil, parking, tolls) can be used instead of the standard rate. The simpler standard rate is almost always preferred. Keep a contemporaneous mileage log with dates, destinations, and purpose.