In 2020, the IRS allows all taxpayers to deduct the total qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their adjusted gross income.
Your adjusted gross income (AGI) is your taxable income minus any adjustments to income such as contributions to a traditional IRA and student loan interest.
Claiming the medical expenses deduction
To claim the medical expenses deduction, you must itemize your deductions. Itemizing requires that you not take the standard deduction, so you should only claim the medical expenses deduction if your itemized deductions are greater than your standard deduction (TurboTax will do this calculation for you).
If you elect to itemize, you must use IRS Form 1040 to file your taxes and attach Schedule A.
- On Schedule A, report the total medical expenses you paid during the year on line 1 and your adjusted gross income (from your Form 1040) on line 2.
- Enter 7.5% of your adjusted gross income on line 3.
- Enter the difference between your expenses and 7.5% of your adjusted gross income on line 4.
- The resulting amount on line 4 will be subtracted from your adjusted gross income to reduce your taxable income for the year.
- If this amount, plus any other itemized deductions you claim, is less than your standard deduction, you should not itemize.
Remember, TurboTax will ask you simple questions about your expenses, tell you which deductions you qualify for, and fill in all the right forms for you.
