How to Deduct a Prescription's Copay on Taxes

Medical expenses for prescription and office visit co-pays add up quickly, especially when you have ongoing medical concerns. Fortunately, the IRS allows taxpayers to deduct a portion of medical expenses that are necessary or prescribed by a physician. This includes amounts you pay to purchase prescription medications. To qualify for the deduction, your total medical expenses for the year must exceed a percentage of your income and you must itemize deduction on the IRS Schedule A form.

Instructions

1. Determine your federal adjusted gross income for the year. This is the amount on Form 1040, line 38. You must prepare your tax return up to line 38 to calculate the amount of medical expenses you may deduct.

2. Multiply your adjusted gross income by 7.5 percent, or .075. You may deduct prescription co-pays and other medical expenses that exceed 7.5 percent of your adjusted gross income.

3. Determine your total medical expenses paid throughout the year and subtract 7.5 percent of your adjusted gross income. The resulting figure is the amount you're eligible to deduct from your taxes.

4. Obtain an IRS Schedule A, Itemized Deductions form. Schedule A is available on the IRS.gov website for the current and prior tax years.

5. Enter the amount of prescription co-pays and other medical expenses you're eligible to deduct on Schedule A, line 1.

References

• IRS.gov: Publication 502 -- Main Content
• IRS.gov: Topic 502 -- Medical and Dental Expenses
• IRS.gov: Schedule A -- Form 1040