Intuit Academy Tax Practice Exam 2025 - Free Tax Practice Questions and Study Guide

To deduct medical expenses, the correct criterion is that they must exceed 7.5% of adjusted gross income (AGI) for taxpayers. This percentage applies to the total of qualified unreimbursed medical expenses incurred during the year that can be included in the itemized deductions on Schedule A of Form 1040.

This threshold was established by the IRS and is applicable for most taxpayers, leading to significant savings for those who have high medical costs. If the medical expenses do not exceed this percentage, they cannot be deducted, meaning careful tracking of expenses is important for taxpayers who anticipate high medical costs.

The other percentages mentioned, such as 5% and 10%, are not applicable under current regulations. The 10% threshold was in place for some periods but has since changed. Additionally, while itemizing deductions is necessary to claim medical expenses, it is not a standalone criterion for deductibility but rather a structural requirement for filing tax returns.