How to Deduct 100% of Health Expenses in 2026

In this video, I'm going to show you how to write off portions of your health expenses legally using the latest tax rules. I'm talking about writing off the cost you pay for doctor visits, health insurance, medical procedures, and even things like your eyeglasses, gym memberships even, weight loss programs, or the toothpaste you buy from the grocery store. Whether you are self-employed or have a traditional job, there are several provisions in the tax code that may allow you to write off these expenses to reduce your taxes. So, today I'm going to show you how, as a licensed CPA that tax plans every day at mycpacoast. com, so let's jump right in. Okay, let's start with the easiest and usually the worst way to deduct these types of expenses with number one, the

medical and dental expense deduction. So, if you take the itemized deduction on your taxes, the IRS allows you to deduct your medical and dental expenses that you pay for yourself, your spouse, and even your dependents during the taxable year. This may include fees paid to doctors, dentists, surgeons, chiropractors, and other medical professionals, as well as any out-of-pocket expenses you pay for health insurance. It can even include fees that you pay for prescription medications, eyeglasses, contact lenses, and even a service animal. And yes, according to the IRS, it can even include cost of health club memberships and weight loss programs if the primary purpose is to quote alleviate obesity. But, there is one problem with this deduction that actually prevents most people from benefiting from it at all. And that is the fact that you're only allowed to write off a portion of these expenses, if even. Specifically, the portion that exceeds 7 and 1/2 % of your adjusted gross income, which is a very high hurdle for most people to jump over. In very simple terms, this means that the more income you earn, the less of these expenses you will actually be able to write off. That's if you even cross the threshold to write off anything. For example, someone with $100,000 in income that has $5,000 of medical expenses would not be able to write off any of those expenses because it is below that 7 and 1/2 % threshold, which would be about $7,500 in this example. That said, I have had clients with a very large amount of medical expenses still benefit from this deduction, but it is usually not the best way to maximize your deduction due to these limitations. A much better way would be to use strategy number two

here, a health savings account, also known as an HSA. Now, if you follow this channel, you know that I love using HSAs because you get a tax deduction for simply transferring money into it. There's no income limit, you don't have to take the itemized deduction, have a business or any of that stuff. The main requirement for opening an HSA is that you simply have to have a high deductible health insurance plan, which is currently defined as having a health plan with a minimum deductible of 1,700 for self coverage or $3,400 for family coverage, but keep an eye on this because they do change every year. But, if you do have a high deductible health plan, then you likely qualify to use this account. And once you open it, the moment you move a single dollar into your HSA, you are getting a dollar back as a tax deduction on your taxes. Plus, the account also kind of works like a tax-free investment account. While the funds sit in your HSA, you can usually invest it into various assets like stocks, index funds, ETFs, and bonds, and any investment growth inside of that account is virtually tax-free. You would never pay any tax on the funds in your HSA as long as you use the funds in the account for qualified health expenses, which are generally the same type of expenses you can deduct with the medical expense deduction. So, using an HSA will grant you a dollar-for-dollar tax deduction, allow you to generate tax-free investment growth, and even make tax-free withdrawals from that account when you use it for its intended purpose. There's quite literally no other tax advantage account that grants you with all of these tax benefits at the same time. But, to be fair, there are some limitations to the HSA, especially around things like the contribution limits. Individuals can only contribute about $5,000 to $10,000 to these type of plans, which also depends on their age, as well as type of health insurance plan they have. Plus, if you pay for any health insurance premiums out of pocket, typically those purchases are not qualified expenses when you are using your HSA, which presents another obstacle. So, let's talk about some other IRS-compliant ways to maximize your deductions here, starting with number three, the self-employment health insurance

deduction. So many people do not know this, but simply operating a trade or business may allow you to write off your entire family's health insurance premiums. Section 162 of the Internal Revenue Code allows self-employed individuals to deduct their health insurance premiums as a legitimate business expense. It does not matter if the policy is in your business name, your personal name, or your spouse's name. So, if you operate a trade or business, even if it is just a side gig, the IRS considers you to be self-employed. And if you pay for health insurance, you might be able to take the self-employed health insurance deduction. For example, if you pay $18,000 for your family's health insurance for the entire year, you might be able to write off that entire amount as a business deduction. Now, to be fair, how your business is actually structured might determine the way you take this deduction. There are different rules for different setups, like S corporations versus sole proprietorships and so on. So, just be sure to talk to your CPA about this. But, if you do qualify, you might be able to write off an indefinite amount of your health insurance premiums as a legitimate business expense. So, we just saw for insurance. Now, let's move on to an advanced way to write off large amounts of other medical expenses you have, which can be done through number four

the health reimbursement arrangement, also known as an HRA. This is basically a benefit arrangement that legally allows your business to reimburse you for out-of-pocket medical expenses you might incur. And it is very common for companies to offer medical reimbursement arrangements to their employees to help them cover unexpected medical expenses. And if you're self-employed, you could effectively set up this entire structure through your own business. Now, from a tax perspective, what's nice about this is that the business will get a tax deduction when it reimburses you for your personal medical expenses, which reduces your business taxes. And then, if you're compliant with the IRS rules, the person receiving the reimbursement would also receive it tax-free. Now, to be fair, in order to set up an HRA, you have to first be operating in an entity structure that allows it in the first place, which usually involves setting up some form of C corporation, which is a big decision in of itself. Plus, the decision to offer this benefit must also consider any costs you might incur by extending this to any other employees you might have, as well as several other considerations. Nevertheless, when this makes sense and is set up correctly, you can use this arrangement to effectively write off all types of eligible medical expenses. To learn more about any of these strategies, just drop a comment below and be sure to subscribe because I already have a ton of published content on these items. And if you need help implementing any of this, just apply to work with my team today at mycpacoach. com.