Health Care and Medical Expense Tax Deductions for Seniors

Many medical expenses are tax-deductible for seniors.

Maureen Stanley Writer & Editor

Jeff Hoyt Editor in Chief

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Can Seniors Deduct Medical Expenses on Their Taxes?

As we reach our golden years, our health and medical needs often expand. Many older adults are facing costly out-of-pocket expenses that can throw off even the best retirement budget. Taxes can certainly be a stressful event (no matter how long you’ve been filing)!

This article will cover the essential facts on what medical expenses you can deduct, which expenses are off-limits, and the difference between itemized and standard deductions so you can stay on top of your finances.

How Much Can I Deduct on My Taxes for Medical Expenses?

Taking care of your health is an investment in your future. However, out-of-pocket medical costs are a significant expense for older adults, especially for those who have retired. The good news is you can claim some of these expenses on your taxes. The key? They must be itemized and exceed 7.5 percent of your adjusted gross income. So, what exactly are itemized deductions? Itemized deductions include amounts paid for medical and dental expenses, state and local taxes, charitable contributions, property taxes, and mortgage interest.

How Is the 7.5 Percent of Adjusted Gross Income Calculated?

According to the IRS, you can deduct only the part of your medical and dental expenses that exceeds 7.5 percent of the amount of your adjusted gross income. 1 These expenses must be itemized.

Let’s look at an example. If your adjusted gross income (AGI) for the 2022 tax year was $50,000, you’d need more than $3,750 ($50,000 x 7.5%) in itemized medical expenses.

A costly year of medical expenses such as dentures, surgery, hearing aids, and a hospital stay can add up quickly. For instance, if your out-of-pocket medical expenses totaled $35,000, you would claim $31,250 ($35,000 – $3,750) in itemized medical expenses in the example AGI above.

Pro Tip: Make tax season easier by staying organized throughout the year. File your medical and dental receipts in a collapsible file folder for easy access when you prepare your return.

However, if your out-of-pocket medical expenses have been minimal, a better option may be to take the IRS standard deduction. The standard deduction does not require any itemization. A good accountant or tax software package could help you determine whether itemizing is right for you.

We spoke with Alison Flores, principal tax research analyst at H&R Block, about deducting medical expenses. To make tracking your deductible medical expenses easier, Flores recommends that you “save all your receipts in a folder or designated spot so they are all together. Don’t wait for the end of the year to try and pull everything together.” Staying organized means you’ll have one less thing to worry about when tax season rolls around!

What Is the IRS Standard Deduction?