Only the amount of medical expenses that is more than 10%(if you are under 65) or 7.5% of your adjusted gross income is actually deductible, and itemized deductions provide no tax benefit until all of them added together are more than your standard deduction. Once you have passed those hurdles, each additional dollar of deduction reduces your tax by that dollar times your marginal tax rate. For example, if you are in the 25% marginal tax rate bracket, each additional dollar of deduction reduces your tax by 25 cents.