Can I Deduct Over the Counter Medications?

March 17, 2023 by Steve Banner, EA, MBA
Woman Shopping for Over the Counter Medications

In general terms, any and all unreimbursed expenses you pay out of your own pocket for the diagnosis, treatment, or cure of conditions that affect any part of the body, or any function of the body are eligible for deduction under the tax laws. This includes payments for legal medical services provided by physicians, surgeons, dentists, and other medical practitioners, as well as any related equipment and supplies.

However, when it comes to medications, you can only deduct the amounts that you pay for medicines or drugs that have been prescribed for you by a doctor. And you can only deduct the net amount that you paid after any reimbursement you may have received. For example, if you paid $50 for a prescription for blood pressure medication and you later received $35 in reimbursement from your insurance provider, the net amount that you paid is $15 ($50 - $35). Your deductible amount for this medication is thus $15.

However, there is an exception to the prescription rule in the case of the drug insulin. The net amounts you pay for this particular drug are deductible, regardless of whether or not you have a prescription.

Other over-the-counter medications, such as vitamins and nutritional supplements, are generally not deductible either. But once again, there is an exception to this rule if your doctor has recommended their use as part of a program to treat a particular ailment. For example, iron supplement tablets are normally not deductible, but depending on the facts and circumstances, they may be deductible if your doctor has recommended that you take these tablets to treat the anemia he has diagnosed in your case.

While you’re at the vitamin counter, you may also decide to add some Vitamin C tablets to your list to help you through the winter weather. However, this expense will not be eligible for deduction unless your doctor has recommended their use to treat a specific medical condition.

If you wish to claim a deduction for an over-the-counter medication that you are taking without a prescription, we would strongly recommend that you obtain a letter or other form of documentation from your doctor. This would provide evidence of the medical necessity of your expenses in case the IRS should ever question the amounts you have claimed.

As a reminder, when it comes to deducting medical expenses, not only are the net amounts you paid for your own medical care expenses deductible, but you can also include any qualifying expenses you paid on behalf of your spouse or dependents.

As a further reminder, medical expenses can only be claimed on the Schedule A Itemized Deductions form that you would attach to your Form 1040 tax return. And Schedule A can only be used if the sum of your expenses in the following categories is higher than the standard deduction based on your filing status:

 

  • Eligible medical and dental expenses
  • State, local, real estate, and personal property taxes
  • Qualified home mortgage and investment interest
  • Gifts to charity
  • Casualty and theft losses

Our best advice is for you to keep receipts and records for your expenses in all these categories throughout the year so that your tax return will be an accurate reflection of all the deductions you are legally entitled to claim – possibly including over-the-counter medications if you meet the qualifying conditions.

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Steve Banner, EA, MBA
Tax Content Developer

 

Steve Banner began his career in the field of income tax in 1977 and has since gathered business experience in a variety of countries and cultures. In addition to the United States, he has lived and worked for extended periods in Australia, Saudi Arabia, Canada, and Sweden. Along the way he studied Adult Education and earned a Bachelor of Education, Master of Educational Administration, and MBA. He joined TaxAudit in 2016, where he is a Tax Content Developer.


 

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