The hidden tax rule most Americans overlook – and it’s limiting your refund

Many Americans are unknowingly reducing their potential tax refund due to a specific, often overlooked, IRS rule concerning itemized deductions for medical expenses. The Internal Revenue Service (IRS) permits taxpayers to deduct medical expenses, but only the amount that exceeds 7.5% of their Adjusted Gross Income (AGI). This rule is frequently missed because the complexity of the U.S. tax code can make it challenging for individuals to discern all applicable thresholds and limitations, especially those with varying AGI levels or significant healthcare costs. Consequently, taxpayers may accumulate eligible medical expenses without realizing a substantial portion is non-deductible, leading to smaller-than-expected tax refund and directly impacting their personal financial planning and available disposable income.