Medical Deductions

Americans living abroad have the opportunity to deduct certain qualified medical expenses they paid during the tax year on their US expat tax return if they itemize deductions.

Which medical expenses can I deduct as an expatriate?

If you itemize deductions on Schedule A, qualified medical expenses which exceed 7.5% of your adjusted gross income (AGI) can be deducted. Effective January 1, 2013 through December 31, 2016 you can claim deductions for medical expenses that exceed 10% of your AGI. There is an exception for taxpayers and their spouses who are 65 and older from Jan. 1, 2013 - Dec. 31, 2016, they can deduct 7,5% of their AGI.

  • For example, if your AGI in 2018 (line 7 of Form 1040) is $75,000, you would be able to deduct unreimbursed qualified medical expenses that exceed $5,625. Therefore, if you had $10,000 in expenses, you could deduct $4,375.

The question I get asked most often is, “Can I deduct foreign health insurance premiums I paid while overseas?”

If you are an employee, you can deduct health insurance premiums paid with after-tax income.

If you are self-employed, health insurance premiums are generally reported as an adjustment to income on page 1 of the 1040 and not as an itemized deduction.

What about the Affordable Care Act otherwise known as Obamacare? How does it affect me as an expat? See here.

Here is an extensive list of medical expenses that are qualified and a second list of expenses that are not qualified. Please see IRS Publication 502 - Medical and Dental Expenses for an up to date list.

What Medical Expenses Are Includible?

  • Abortion
  • Acupuncture
  • Alcoholism
  • Ambulance
  • Annual Physical Examination
  • Artificial Limb
  • Artificial Teeth
  • Autoette
  • Bandages
  • Birth Control Pills
  • Body Scan
  • Braille Books and Magazines
  • Breast Pumps and Supplies
  • Breast Reconstruction Surgery
  • Capital Expenses (special equipment installed in your home for medical reasons)
  • Car (special equipment installed for person with disabilities)
  • Chiropractor
  • Christian Science Practitioner
  • Contact Lenses
  • Crutches
  • Dental Treatment
  • Diagnostic Devices
  • Disabled Dependent Care Expenses
  • Drug Addiction
  • Drugs
  • Eye Exam
  • Eyeglasses
  • Eye Surgery
  • Fertility Enhancement
  • Founder's Fee
  • Guide Dog or Other Service Animal
  • Health Institute
  • Health Maintenance Organization (HMO)
  • Hearing Aids
  • Home Care
  • Home Improvements
  • Hospital Services
  • Insurance Premiums (paid out of pocket as an after tax expense)
  • Intellectually and Developmentally Disabled, Special Home for
  • Laboratory Fees
  • Lactation Expenses
  • Lead-Based Paint Removal
  • Learning Disability
  • Legal Fees
  • Lifetime Care—Advance Payments
  • Lodging
  • Long-Term Care
  • Meals
  • Medical Conferences
  • Medical Information Plan
  • Medicines
  • Nursing Home
  • Nursing Services
  • Operations
  • Optometrist
  • Organ Donors
  • Osteopath
  • Oxygen
  • Physical Examination
  • Pregnancy Test Kit
  • Prosthesis
  • Psychiatric Care
  • Psychoanalysis
  • Psychologist
  • Special Education
  • Sterilization
  • Stop-Smoking Programs
  • Surgery
  • Telephone
  • Television
  • Therapy
  • Transplants
  • Transportation
  • Trips
  • Tuition
  • Vasectomy
  • Vision Correction Surgery
  • Weight-Loss Program
  • Wheelchair
  • Wig
  • X-ray

What Expenses Are Not Includible?

  • Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby
  • Controlled Substances
  • Cosmetic Surgery
  • Dancing Lessons
  • Diaper Service
  • Electrolysis or Hair Removal
  • Flexible Spending Account
  • Funeral Expenses
  • Future Medical Care
  • Hair Transplant
  • Health Club Dues
  • Health Coverage Tax Credit
  • Health Savings Accounts
  • Household Help
  • Illegal Operations and Treatments
  • Insurance Premiums
  • Maternity Clothes
  • Medical Savings Account (MSA)
  • Medicines and Drugs From Other Countries
  • Nonprescription Drugs and Medicines
  • Nutritional Supplements
  • Personal Use Items
  • Swimming Lessons
  • Teeth Whitening
  • Veterinary Fees
  • Weight-Loss Program

This is not an extensive explanation on expat medical deductions. For more information, contact us today. 

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By Stephen Stambaugh

Last Updated January 15, 2019