IRS rules allow taxpayers to deduct medical expenses that exceed 7.5 percent of a taxpayer's adjusted gross income (generally wages plus other income, such as interest and dividends). Although deductions for medical expenses are not an automatic red flag for an IRS audit, the government is auditing more returns. This means taxpayers should carefully document their expenses.
According to a CNN report in 2008, the IRS has increased the number of returns it audits.
Although itemized deductions, such as for medical expenses, do not automatically trigger an IRS audit, the more deductions you claim, the greater your chances of being audited.
If you claim a deduction for medical or dental expenses, keep detailed records to document those expenses. Be sure to save all receipts, not just canceled checks.
IRS Publication 502 covers deductions for medical and dental expenses. It outlines what expenses taxpayers can deduct on their tax returns.
If you receive notice of an audit, take it seriously but do not panic. Many audits do not even require a face-to-face meeting, but only request additional information. Remember, keep records of all medical and dental expenses if the IRS questions these.
Be sure to keep the names and contact information for any physicians who treated you. Contact their offices if you need documentation of services or treatments you received during the year.
- Income Tax Deductions for Medical Expenses
- Red Flags for Tax Audits
- Congress.gov. "H.R.3301 – Taxpayer Certainty and Disaster Tax Relief Act of 2019." Accessed Jan. 4, 2020.
- Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2020." Accessed Jan. 4, 2020.
- Internal Revenue Service. "Itemize or Choose the Standard Deduction." Accessed Jan. 4, 2020.
- Internal Revenue Service. "Schedule A Itemized Deductions." Accessed Jan. 6, 2020.
- Internal Revenue Service. "2019 Instructions for Schedule A (2019)." Accessed Jan. 4, 2019.
- Internal Revenue Service. "Publication 502 (2018) Medical and Dental Expenses." Accessed Jan. 6, 2020.
- Internal Revenue Service. "IRS Issues Standard Mileage Rates for 2020." Accessed Jan. 4, 2020.
Shane Hall is a writer and research analyst with more than 20 years of experience. His work has appeared in "Brookings Papers on Education Policy," "Population and Development" and various Texas newspapers. Hall has a Doctor of Philosophy in political economy and is a former college instructor of economics and political science.