In some cases, dental bills may be tax deductible. If you itemize your deductions on your tax return, you may be able to deduct dental expenses that exceed 7.5% of your adjusted gross income (AGI).
Deductible Dental Expenses
Medically necessary expenses are generally deductible. This includes expenses for services such as cleanings, fillings, extractions, and orthodontia, as well as expenses for dentures and other dental prostheses.
Cosmetic dental procedures such as teeth whitening and veneers are usually not tax deductible. Additionally, expenses that are reimbursed by insurance or other sources are not deductible.
The reason you can’t deduct expenses paid by insurance is that insurance paid those expenses. However, you may be able to include your insurance premiums in your medical expenses.
Medical Expense Deduction
Dental expenses are part of the medical expense deduction, which is an itemized deduction that allows taxpayers to deduct the cost of medical and dental expenses that exceed 7.5% of their adjusted gross income (AGI). In other words, if your total medical and dental expenses for the year add up to more than 7.5% of your AGI, you can deduct the amount that exceeds that threshold.
In addition to dental expenses, the medical expense deduction covers a wide range of medical expenses, including:
- Doctor and dentist visits
- Prescription drugs
- Hospital stays and surgeries
- Laboratory fees and diagnostic tests
- Medical devices such as hearing aids and glasses
- Long-term care services
- Medical transportation expenses
- Premiums for health insurance, including Medicare premiums
It’s important to note that not all medical expenses are tax deductible. For example, over-the-counter medications and cosmetic procedures are not eligible for the medical expense deduction.
To claim the medical expense deduction, you must itemize your deductions on your tax return using Schedule A. You will need to keep records of all your medical and dental expenses throughout the year, including receipts, bills, and insurance statements, in order to accurately calculate your deduction
Medical and Dental Expenses and Health Savings Accounts
If you pay for your dental expenses with funds from a Health Savings Account (HSA), you generally cannot also claim those expenses as a tax deduction on your tax return.
The reason for this is that HSA contributions are made with pre-tax dollars, and withdrawals for qualified medical expenses, including dental expenses, are tax-free. Therefore, if you use HSA funds to pay for dental expenses, you have already received a tax benefit and cannot claim those expenses again as a tax deduction.
There is an exception to this rule for taxpayers who are 65 or older or who are permanently disabled. They can withdraw funds from their HSA for non-medical expenses without penalty, but they will be subject to income tax on the amount withdrawn. In this case, if HSA funds are used for dental expenses, the taxpayer may be able to claim those expenses as a tax deduction.
Note that you don’t HAVE to use your HSA money. You can pay your dental expenses with your regular checking account money and save your HSA money for later.
Many people prefer to treat their HSA as a second IRA and never spend from their HSA. Others won’t use their HSA money in years they can qualify for an itemized deduction since using their HSA money will lower their deduction.