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medical expenses

Q&A: What can retirees do to deduct medical expenses?

August 5, 2025 By Liz Weston Leave a Comment

Dear Liz: My wife and I, both in our early 90s, are fortunate to have good health insurance. However, we have significant expenses that are not covered. As you might expect, we are retired and receive income from Social Security, pensions, annuities and investments. Are we eligible to use flexible health accounts funded with pretax dollars? If so, what’s the best way to set that up and how would we pay those uncovered health bills?

Answer: Unfortunately, you don’t have access to pretax accounts that could help you pay medical bills.

Flexible spending accounts are offered by employers, and contributions are limited annually (in 2025, the limit is $3,300). Health savings accounts have higher limits but require you to have a qualifying high-deductible health insurance plan. Once you’re on Medicare, as you two presumably are, you are no longer allowed to contribute to an HSA.

You might be able to deduct medical expenses that exceed 7.5% of your adjusted gross income. To claim the deduction, you would need to have enough itemized expenses to exceed the standard deduction, which in 2025 is $34,700 for a married couple filing jointly who are 65 and older. (The standard deduction for a married couple filing jointly is $31,500, while people 65 and older get an additional deduction of $1,600 each.)

There’s also a new, temporary $6,000 deduction for people 65 and older that is available whether you itemize or take the standard deduction. This bonus deduction begins to phase out for adjusted gross income above $150,000 for married couples filing jointly and disappears at AGIs above $250,000. This deduction is set to expire after the 2028 tax year.

Filed Under: Health Insurance, Medical Debt, Q&A, Retirement Tagged With: Flexible Spending Account, FSA, health savings account, HSA, itemized deductions, medical expense deduction, medical expenses, medical expenses in retirement, out-of-pocket medical expenses

Q&A: The fine print on deducting medical expenses

October 7, 2024 By Liz Weston

Dear Liz: I take $5,000 per month out of my brokerage account (and the $1,400 in taxes when I withdraw the money) for my husband’s Alzheimer care facility where he now lives 24/7. Can I only claim that on my taxes under medical expenses if I itemize my deductions on my taxes? I don’t have any other deductions.

Answer: Your husband’s expenses may be enough to justify itemizing even if you don’t have other deductions.

The standard deduction for married couples in 2024 is $29,200. To itemize, your deductions would need to be higher than that amount. Furthermore, medical expenses must exceed 7.5% of your adjusted gross income to be deductible, notes Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.

If your husband meets certain criteria, however, the deduction can include the expenses related to meals and lodging at the facility as well as the medical care portion, Luscombe says.

A licensed healthcare professional must certify annually that your husband is chronically ill and living in the care facility due to medical necessity, he says. A tax pro or the facility itself can provide further details.

Filed Under: Q&A, Taxes Tagged With: long term care, medical expenses, Taxes

Wednesday’s need-to-know money news

February 19, 2020 By Liz Weston

Today’s top story: When and how to say no to extended car warranties. Also in the news: How to save money with used baby items, medical expenses you can deduct on your taxes, and why you really need to set up automatic credit card payments.

Extended Car Warranties: When and How to Say No
Don’t pay for something you may never use.

New Baby? Save Money With These Used Items
You’ll only use them for a brief time.

Which medical expenses can you deduct on your taxes?
No, you can’t deduct your medical weed.

You Really Need to Set Up Automatic Credit Card Payments
Never miss a due date again.

Filed Under: Liz's Blog Tagged With: automatic credit card payments, baby items, extended car warranties, medical expenses, tax deductions, tips

Monday’s need-to-know money news

February 10, 2020 By Liz Weston

Today’s top story: Should your student loans and your spouse’s get hitched? Also in the news: Investing vs paying student loans, the blunt truth about medical expenses, marijuana, and your tax returns, and how to figure out your finances when you’re single.

Should Your Student Loans and Your Spouse’s Get Hitched?
A look at the pros and cons.

SmartMoney Podcast: ‘Should I Invest or Pay Down My Student Loans?’
Where should your money go?

Blunt Truths About Medical Expenses, Marijuana and Your Tax Return
The IRS needs to chill.

How to Figure Out Your Finances When You’re Single
Making the budget that works solely for you.

Filed Under: Liz's Blog Tagged With: budgets, couples and money, investing vs paying off student loans, medical expenses, medical marijuana, SmartMoney podcast, Student Loans, tax deductions

Thursday’s need-to-know money news

December 5, 2019 By Liz Weston

Today’s top story: The pros and cons of airline credit cards. Also in the news: How to maximize your points and miles this holiday season, your car crash checklist, and how to maximize the tax benefits that come with medical expenses.

Are Airline Credit Cards Worth It?
The pros and cons.

How to Maximize Your Points and Miles This Holiday Season
Giving yourself a gift.

Your Car Crash Checklist: 6 Life- and Money-Saving Tips
What to do before and after.

Medical expenses come with tax benefits. Here’s how to maximize yours this year
The average American spends $17K on healthcare per year.

Filed Under: Liz's Blog Tagged With: airline credit cards, car accidents, checklists, medical expenses, miles, reward points, tax benefits

Tuesday’s need-to-know money news

October 10, 2017 By Liz Weston

Today’s top story: 7 signs you’ve gone from frugal to cheap. Also in the news: 7 ways to avoid becoming a scary student loan statistic, following the lead of Millennials to save more for retirement, and retirement community fees that can be deducted as medical expenses.

7 Signs You’ve Gone From Frugal to Cheap
A slippery slope.

7 Ways to Avoid Becoming a Scary Student Loan Stat
Don’t become a statistic.

To Save More for Retirement, Follow These Millennials’ Lead

You can deduct these retirement community fees as medical expenses
Unexpected savings.

Filed Under: Liz's Blog Tagged With: cheap, frugal, medical expenses, millennials, retirement communities, retirement savings, Student Loans, tax deductions

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