If you have spent a small fortune on doctors, dentists, or prescriptions this year, IRS Publication 502 might just be your new best friend come tax season. This essential document lays out the ground rules for what the Internal Revenue Service considers “medical and dental expenses,” offering a roadmap for taxpayers who want to itemize deductions on Schedule A (Form 1040) and potentially lower their taxable income significantly. While most people stick to the standard deduction, those with high healthcare costs—specifically expenses that exceed 7.5% of their Adjusted Gross Income (AGI)—can unlock substantial savings by knowing exactly what qualifies. From obvious costs like health insurance premiums and hospital visits to surprising write-offs like acupuncture, weight-loss programs for specific diseases, and even the mileage you drive to get to appointments (which is 21 cents per mile for 2025), Publication 502 covers it all. Navigating the tax code can feel like reading a foreign language, but understanding the difference between a nondeductible “general health” expense (sorry, your gym membership probably doesn’t count) and a qualified medical necessity is the key to maximizing your refund. In this guide, we will break down the eligible expenses, explain the “7.5% rule” in plain English, and highlight the documentation you need to keep the IRS happy.
What Exactly Is IRS Publication 502?
Think of IRS Publication 502 as the official rulebook for healthcare tax deductions. It defines “medical expenses” as the costs for diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. It essentially tells you what you can and cannot include when you are adding up your medical bills for the year. This publication is updated annually, so keeping an eye on changes—like adjustments to the standard mileage rate—is crucial for accurate filing.
The Magic Number: The 7.5% AGI Threshold
The most important rule in Publication 502 is the threshold for deductibility. You cannot just deduct every dollar you spent at the pharmacy. Instead, you can only deduct the portion of your unreimbursed medical expenses that exceeds 7.5% of your Adjusted Gross Income (AGI).
- Example: If your AGI is $50,000, your 7.5% threshold is $3,750.
- If you spent $3,000 on medical care, you deduct $0.
- If you spent $5,000, you can deduct $1,250 ($5,000 – $3,750).
This math means that for many healthy individuals, itemizing medical expenses isn’t worth it. But for those with chronic conditions, major surgeries, or high insurance premiums, it can be a game-changer.
Surprising Expenses You Can Deduct
While everyone knows doctor visits count, Publication 502 lists dozens of lesser-known expenses that qualify:
- Transportation: Bus, taxi, train, or ambulance fees, plus out-of-pocket car expenses (gas/oil) or the standard mileage rate (21 cents/mile for 2025).
- Preventive Care: Annual physicals, dental cleanings, and eye exams.
- Specialized Treatments: Acupuncture, chiropractor visits, and physical therapy.
- Modifications: Home improvements like wheelchair ramps or grab bars installed for medical reasons.
- Addiction Programs: Costs for inpatient treatment for alcohol or drug addiction, including meals and lodging.
- Reproductive Health: Birth control pills, pregnancy test kits, and legal abortion services.
- Essentials: Contact lenses, hearing aids (and batteries!), false teeth, and crutches.
What Is NOT Deductible?
Just as important as what you can deduct is what you can’t. The IRS is strict about expenses that are merely for “general health” or cosmetic purposes.
- Cosmetic Surgery: Face-lifts, hair transplants, and teeth whitening are a no-go unless necessary to fix a deformity from an accident or disease.
- Non-Prescription Drugs: You generally cannot deduct over-the-counter medicines (like Tylenol or vitamins) unless you have a prescription for them.
- Gym Memberships: Unless a doctor prescribes a specific weight-loss regimen for a diagnosed disease (like obesity or hypertension), your monthly gym fee is personal, not medical.
- Late Fees: If you pay your doctor late, the interest or penalty fee is on you, not the IRS.
Whose Expenses Can You Claim?
You can include medical expenses you paid for yourself, your spouse, and your dependents. This is huge for families! If you pay for your child’s braces or your elderly parent’s hearing aids (provided they qualify as your dependent), those costs go into your total pot for the 7.5% calculation.
Frequently Asked Questions (FAQs)
Q: Can I deduct my health insurance premiums?
A: Yes, you can deduct premiums for medical and dental insurance if you pay them with after-tax dollars (not via a pre-tax workplace plan).
Q: Can I deduct over-the-counter medicines?
A: Generally, no. OTC drugs like aspirin or vitamins are not deductible unless prescribed by a doctor. Insulin is the exception.
Q: What is the medical mileage rate for 2025?
A: For 2025, the standard mileage rate for using your car for medical reasons is 21 cents per mile.