How to Deduct Rx Costs on Your Taxes
Find out if your medical (including prescription drug) spending is eligible.
Did you know that you can deduct prescription drug costs, along with other qualified medical expenses, on your 2018 taxes? If your Rx spending in 2018 exceeded a specific dollar amount (see below), deducting these expenses might be worth considering.
Here’s how it works
For the 2018 tax year, you can deduct any dollar amount you spent on medical expenses over 7.5% of your adjusted gross income (AGI). These medical expenses can include, but are not limited to, prescription drugs; fees to doctors, dentists, psychologists and other providers; prescription eyeglasses; inpatient hospital care and more.
Here’s how to calculate how much you can deduct.
- Multiply your AGI by .075 (7.5%).
- Subtract your overall qualified medical spending (including the money you spent on prescription drugs) by that number to see how much you can deduct.
- Your AGI is $50,000 and you spent $6,000 on medical expenses.
- $50,000 (AGI) x .075 (75%) = $3,750
- $6,000 (total medical spending)- $3,750 (7.5% of AGI) = $2,250 (medical expenses you can deduct)
Here are the rules
- Most people can only make these itemized deductions if they do not take the standard deduction. (See standard deductions in Table 6.) If the standard deduction is greater than the total of your itemized deductions (including any medical deductions you make), you may want to consider taking the standard deduction instead (be sure to check with a tax professional if you’re unsure).
- Most people can deduct prescription drugs and other medical expenses for themselves, their spouse and any dependents.
- Most people can deduct prescription drugs and these other medical expenses. See if your expenses qualify by taking this IRS survey.
- Most people cannot deduct over-the-counter drugs, nutritional supplements or vitamins unless they’re prescribed by a doctor.
Here’s how to do it
- If you work with a tax professional to prepare your taxes, discuss these deductions with him or her. He or she will help you determine if your expenses qualify for deduction and, if so, whether doing so would be beneficial to you.
- If you’re filing your taxes on your own, you can make these deductions on Schedule A.
Here’s how to save money on prescriptions during tax season and year-round
Budgets can become tighter than usual during tax season, whether your refund is less than you expected or you end up owing money. If you find yourself needing to cut back on your spending during this time of the year, remember that you can save money on generic prescription drugs (now and year-round) with Blink.
Hear what Blink Health is like from real people who have used it to save money.
Blink Health is not insurance. The discount prescription drug provider is Blink Health Administration, LLC, 233 Spring Street, 8th Floor East, New York, NY 10013, (844) 366–2211, www.blinkhealth.com