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Top 20 Medical Deduction
Medical expense tax deductions in 2024
Tax season. The time of year when you revisit all of your favorite receipts and invoices from the past 12 months. But there is a silver lining to this – medical expenses deductions. If you’re out of the loop, you can claim medical expenses as tax write-offs (as long as they are IRS approved).
Every American taxpayer can take this deduction, regardless of whether you are a W-2 employee or self-employed. You should report this deduction on Schedule A, which is attached to Form 1040. This is an itemized deduction, so you’ll need to have a record of your medical expenses.
Key takeaways:
- Medical expenses are tax-deductible for every taxpayer
- This is an itemized deduction that is reported on Schedule A
- There are IRS-set rules for qualified expenses and limits to the deduction
Table of contents
How can you write off medical expenses?
Claiming the medical expense tax deduction means itemizing your tax deductions. So, if you want to write off medical expenses, you’ll have to make sure that itemizing will result in a bigger tax break than opting for the standard deduction.
If you’re looking to deduct unreimbursed expenses, the amount you can deduct is capped at 7.5% of your AGI (Adjusted Gross Income). This percentage was actually lowered from 10% due to the Tax Cuts and Jobs Act of 2017.
Let’s use an example. If you spent $12,000 on healthcare expenses in 2023 and had an AGI of $60,000, you could claim a tax deduction of $7,500. Again, you can only claim this tax deduction if your insurance hasn’t already paid for it. So, if you’re filing your 2023 return, this is how you’ll find how much of your medical expenses are deductible in 2023.
What medical expenses are tax-deductible?
There are so many types of medical expenses that the IRS allows you to deduct. Check out Publication 502 for the entire list of expenses that are eligible to claim. Self-employed individuals can also claim the health insurance deduction if they pay for it themselves.
And while this deduction does not affect your self-employment taxes, a lower AGI is still good news as it will lower your federal income tax (which you’ll also have to pay). You will calculate your self-employment income on Form Schedule C. If your tax liability is over $1,000, use an estimated tax calculator to pay quarterly taxes.
If you missed a deadline or applied for an extension but weren’t to pay your taxes by the original deadline (it happens to the best of us), you can use a tax penalty calculator to total your owed penalties to the IRS.
Itemizing these deductions can be difficult if you’re not always on top of your record keeping. With FlyFin, you just link your expenses and A.I. will find all the medical tax deductions you can claim as a self-employed individual. 1099 tax help is available 24/7 on the app from expert CPAs ready to answer questions or even prepare and file your state and federal tax returns for you.
Quick tip
You can use a 1099 tax calculator to make finding itemized deductions easier.
What medical expenses are not tax-deductible?
The IRS allows taxpayers to deduct a wide range of expenses. But certain medical expenses cannot be claimed. Like we mentioned earlier, you are not allowed to deduct medical expenses you have already been reimbursed for.
Only medical expenses accumulated in the same tax year are eligible to be written off. So, if you’re filing a 2023 return in 2024, you can only deduct the expenses paid during the 2023 calendar year.
When it comes to medical expenses, it's important to understand the tax implications of paying with certain types of accounts. For example, if you use funds from a flexible spending account (FSA) or health savings account (HSA) to cover your medical costs, you may be unable to deduct those expenses from your taxes.
Why is that? Well, FSAs and HSAs are designed to offer tax advantages to their users. With an FSA, you can contribute pre-tax dollars to the account, which can then be used to pay for qualified medical expenses. Because the money you use from these accounts is already tax-advantaged, you can't double-dip by deducting those expenses on your taxes as well.
The bottom line is that itemizing your medical expenses can be a good way to get the most out of your available tax deductions. This is only a viable option if you incurred a lot of out-of-pocket costs during the year that exceed the standard deduction. Make sure to save your receipts and invoices for all the qualified expenses you’re planning to deduct.You should also save all your records for deductions from your 1099 employee taxes. This way, when you sit down to file, the process will be much easier.
What’s FlyFin?
FlyFin is the number one A.I.-powered tax service for freelancers, gig workers, independent contractors and sole proprietors.
The app tracks all your business expenses automatically to find every possible tax deduction and lets you easily categorize expenses like goodwill tax deductions.
FlyFin's CPA team files guaranteed 100% accurate state and federal tax returns for you – to save you a couple of thousand dollars and a ton of time on your taxes.
Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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