You have to subtract what they give you. So you would only include the $500 not the $1,000. If you included the $500 reimbursed amount, you would be double dipping as the money they reimburse you is not taxable to you.
If you are itemizing your return and adding medical expenses, which include insurance premiums, your medical expenses are only deductible for the amount that is over 7.5% of your AGI. So if your AGI is $50,000, only the expenses that are greater than $3,750 are deductible. Itemized expenses also include mortgage interest, gambling losses up to 90% or up to winnings (whichever is less), charitable contributions, state and local taxes up to $40,000, medical expenses in excess of 7.5% of your AGI and federally declared casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss. Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your expenses.
The 2025 Standard Deductions are as follows:
- Married Filing Joint (MFJ) $31,500
- Married Filing Separate (MFS) $15,750
- Head of Household (HOH) $23,625
- Single $15,750
Blind or over 65 and MFJ or MFS add $1,600
Single or HOH if blind or over 65 add $2.000
Standard Deduction vs. Itemized Deductions: Which Is Better?
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