If you had significant out-of-pocket medical costs in 2026, you may be able to deduct them on your federal return -- but only qualifying medical expenses that exceed 7.5% of your adjusted gross income (AGI), and only if you itemize deductions rather than taking the standard deduction. For many filers, this deduction only becomes available in years of unusually high medical spending: a major surgery, a serious diagnosis, or extended long-term care.
The 7.5% AGI Floor: How It Works
The threshold means you cannot deduct all medical expenses -- only the amount above 7.5% of AGI. For a filer with $60,000 in AGI, the floor is $4,500. If you paid $8,000 in qualifying medical costs, you can deduct $3,500 ($8,000 minus $4,500). If you paid only $5,000, your deductible amount is just $500 -- and that small deduction may not be worth giving up the standard deduction.
The 7.5% threshold applies for all filers in 2026, regardless of age. It was permanently set at this level by the Tax Cuts and Jobs Act and confirmed by subsequent legislation.
What Qualifies as a Medical Expense
The IRS defines qualifying medical expenses broadly as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. Common qualifying expenses include:
- Doctor, dentist, and specialist visit co-pays and fees not covered by insurance
- Hospital stays, surgery, and anesthesia
- Prescription medications (not over-the-counter unless prescribed)
- Medical equipment: wheelchairs, crutches, blood pressure monitors, CPAP machines
- Eyeglasses, contact lenses, and eye exams
- Mental health treatment and therapy sessions
- Long-term care services and eligible long-term care insurance premiums (subject to age-based limits)
- Mileage driven for medical purposes (21 cents per mile in 2026)
- Hearing aids and batteries
- Fertility treatments, including IVF
- Smoking cessation programs and prescription nicotine patches
- Health insurance premiums paid with after-tax dollars (not pre-tax through an employer plan)
- Inpatient treatment for alcohol or drug addiction
- Weight-loss programs prescribed by a doctor to treat a specific disease (such as obesity or hypertension)
What Does Not Qualify
The IRS specifically excludes certain health-related expenses that might seem medical:
- Over-the-counter medications not prescribed by a doctor
- Cosmetic surgery unless medically necessary to correct a deformity from a congenital abnormality, personal injury, or disease
- Gym memberships, fitness trackers, and general wellness programs
- Premiums paid with pre-tax employer dollars (already excluded from income)
- Expenses fully reimbursed by insurance or paid from an HSA or FSA
- Teeth whitening
- Vitamins and supplements unless prescribed for a diagnosed condition
A Worked Dollar Example
Consider a single filer with $75,000 in AGI who had the following medical expenses in 2026:
- Out-of-network surgery: $9,500
- Follow-up specialist visits: $1,200
- Prescription medications: $800
- Medical mileage (400 miles at 21 cents): $84
- Total medical expenses: $11,584
AGI floor: $75,000 x 7.5% = $5,625. Deductible amount: $11,584 minus $5,625 = $5,959. At a 22% marginal rate, that deduction saves approximately $1,311 in federal income tax -- but only if total itemized deductions exceed the $15,000 standard deduction for single filers.
The Standard Deduction Comparison
For 2026, the standard deduction is $15,000 for single filers and $30,000 for married filing jointly. Your total Schedule A deductions -- medical expenses plus state and local taxes, mortgage interest, and charitable contributions -- must exceed these amounts for itemizing to be worthwhile.
The medical expense deduction is most valuable in years with an extraordinary medical event. A single large deductible medical bill can push total Schedule A deductions above the standard deduction threshold even when other itemized deductions are modest. For a side-by-side comparison of both approaches, see the standard deduction vs. itemized guide.
Long-Term Care Insurance Premiums
Premiums paid for qualified long-term care insurance are deductible as medical expenses, subject to age-based annual limits. For 2026, the deductible limits are approximately $480 (age 40 or under), $900 (age 41-50), $1,800 (age 51-60), $4,770 (age 61-70), and $5,960 (age 71 and older). These are maximums -- the actual deductible amount is still subject to the 7.5% AGI floor.
Health Savings Account Interaction
If you pay medical expenses from an HSA, those expenses are not deductible on Schedule A. HSA distributions for qualified medical expenses are already tax-free -- you cannot get a double tax benefit. Only out-of-pocket costs paid directly from non-HSA funds qualify for the Schedule A deduction.
How to Claim the Deduction
Report qualifying medical expenses on Schedule A (Form 1040), lines 1 through 4. Line 1 is total qualifying medical expenses; line 3 is your AGI multiplied by 7.5%; line 4 is the deductible amount (line 1 minus line 3, if positive). Attach Schedule A to your Form 1040 in place of taking the standard deduction.
Keep receipts, explanation of benefits (EOB) documents from your insurer, and mileage logs for at least three years after filing.
Source
IRS Publication 502 (Medical and Dental Expenses); IRS Topic No. 502; IRS Rev. Proc. 2025-13 (2026 long-term care premium limits).
Bunching Medical Expenses: A Planning Strategy
Because the 7.5% AGI floor is calculated annually, some taxpayers benefit from "bunching" -- deliberately timing elective medical procedures and purchases into a single tax year to push total expenses above the floor. If you need dental implants, new eyeglasses, and a hearing aid, scheduling them in the same calendar year may allow you to deduct a meaningful amount, whereas spreading them across three years might result in no deduction at all.
This strategy works best when combined with other Schedule A deductions. A taxpayer who is near the standard deduction threshold might find that bunching medical expenses in a single year pushes them over the line and makes itemizing worthwhile for that year, then takes the standard deduction in alternating years.
Self-Employed Health Insurance Deduction
If you are self-employed (including gig workers and independent contractors), you may deduct 100% of health insurance premiums paid for yourself and your family as an above-the-line deduction on Schedule 1, Form 1040 -- not on Schedule A. This deduction is separate from and in addition to any medical expense deduction, and it reduces your AGI directly, which is more valuable than an itemized deduction. You cannot use the same premiums for both the self-employed health insurance deduction and the Schedule A medical expense deduction.
Nursing Home and Assisted Living Costs
Long-term care in a nursing home or assisted living facility can be one of the largest medical expense deductions available. If you or a dependent is in a nursing home primarily for medical care, the entire cost -- including meals and lodging -- qualifies as a medical expense. If the primary reason is personal (not medical), only the nursing care portion qualifies. For assisted living facilities where residents receive medical monitoring, custodial care, and medication management, a significant portion of the monthly fees typically qualifies, but you may need a letter from the facility administrator breaking out the medical care component.
Given the 7.5% AGI floor, a retired individual with $50,000 in Social Security and IRA income would have a floor of $3,750. Annual nursing home costs of $80,000 to $120,000 would generate a deduction of $76,250 to $116,250 -- easily justifying itemizing and potentially eliminating most of the taxable income for that year. This makes the medical expense deduction especially impactful for families facing major long-term care costs.