How to Write Off Medical Expenses on Your Taxes (2025 Edition)

sonya9686
Sep 26
3 min read

Medical costs can feel overwhelming, but the good news is that the tax code gives you several ways to reduce your bill at tax time. Think of it as the IRS offering a little relief for the money you spend on your health.

In this guide, I’ll walk you through the main options — from standard deductions to self-employed write-offs and tax-friendly accounts like HSAs and FSAs — and explain how they work in plain English.

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What Counts as a Deductible Medical Expense?

In simple terms, the IRS lets you deduct expenses that are primarily for medical care — things like treatment, prevention, or equipment that helps with a medical condition.

Examples include:

Visits to doctors, dentists, or specialists
Prescription medications and medical supplies (like insulin, crutches, or hearing aids)
Preventive care (check-ups, screenings, vaccines)
Insurance premiums you pay out-of-pocket (not through an employer)
Travel to receive medical care (mileage, parking, airfare in some cases)

💡 Tip: Only your out-of-pocket costs count. If insurance or an HSA/FSA already covered something, you can’t deduct it again.

On the flip side, general health or cosmetic costs (like vitamins, gym memberships, or elective cosmetic surgery) usually don’t qualify.

The 7.5% Rule — Why It Matters

Here’s the catch: you can only deduct medical expenses that are more than 7.5% of your income (AGI).

For example, if your AGI is $50,000, the first $3,750 of medical costs doesn’t count. If you had $5,000 in expenses, only $1,250 would be deductible.

This means most people don’t benefit from this deduction unless they had a year with very high medical bills.

Do You Need to Itemize?

Yes — this deduction only works if you itemize your taxes instead of taking the standard deduction. Many people stick with the standard deduction because it’s higher, but if your medical bills (plus things like mortgage interest and state taxes) push your itemized total above the standard deduction, it could be worth it.

Extra Breaks for the Self-Employed

If you’re self-employed, there’s good news: you may be able to deduct 100% of your health insurance premiums (for yourself and your family), even if you don’t itemize.

This deduction comes “above the line,” meaning it directly reduces your income before tax is calculated. It’s one of the best breaks available to freelancers, small business owners, and consultants.

HSAs and FSAs — Paying with Pre-Tax Dollars

Even if you can’t claim a deduction on your tax return, you can still save through tax-advantaged accounts:

HSA (Health Savings Account): Available if you have a high-deductible plan. You get a “triple tax benefit” — tax-free contributions, growth, and withdrawals for medical expenses. Plus, unused funds roll over forever.
FSA (Flexible Spending Account): Offered by many employers. You set aside pre-tax money for medical expenses, but funds generally must be used within the year.

Both let you pay for health costs with untaxed dollars, which can add up to big savings.

State Tax Rules

Some states are more generous than federal rules. For example:

New Jersey allows deductions above just 2% of income
Arizona allows all medical expenses with no threshold

It’s worth checking your state’s rules — you might qualify for a break even if you don’t on your federal return.

Takeaway: Don’t Leave Money on the Table

Medical expense write-offs can feel tricky, but the key points are:

Only true medical expenses count (not general health or cosmetic costs)
The 7.5% threshold means deductions usually help in years with big bills
Self-employed? Don’t miss the insurance deduction
HSAs and FSAs are powerful tools to save tax all year long

If you’re not sure whether you qualify — or want to plan ahead for large medical costs — this is where professional guidance makes a difference.

📞 Sonya Moreno, CPA and her team specialize in helping clients maximize tax benefits while staying compliant. Whether it’s itemizing, using an HSA strategically, or planning around big expenses, we’ll help you find the smartest way forward.