Tax Refund

Two medications – Ozempic and Wegovy – are generating significant attention in the media. First, Ozempic (generic name Semaglutide) is a drug to help treat diabetes; according to their official website, “along with diet and exercise, it is proven to improve blood sugar in adults with type 2 diabetes.” In addition, if adults with type 2 diabetes and known heart disease take the injectable medication, it “reduces the risk of major cardiovascular events such as stroke, heart attack, or death.”

However, Ozempic – which received approval from the Food and Drug Administration for treating diabetes in 2017– cautions the drug “is not for weight loss” but it “may help you lose some weight.” 

Wegovy is an injectable prescription medication containing the same ingredient as Ozempic (semaglutide). Wegovy’s website states it “may help adults and children aged ≥12 years with obesity (BMI ≥30 for adults, BMI ≥ 95th percentile for age and sex for children), or some adults with excess weight (BMI ≥27) (overweight) who also have weight-related medical problems to help them lose weight and keep it off.” They also recommend users should implement a reduced-calorie meal plan and increased physical activity while taking the once-weekly medication.

If you read the current headlines about Ozempic, many people are using the drug solely for weight loss, thus creating shortages for those with diabetes. In some cases, physicians are also prescribing Ozempic for weight loss.

With Ozempic and Wegovy being a hot topic lately, you may be wondering when and if you can deduct the costs of the drugs on your taxes.

If I use Ozempic to treat diabetes, can I deduct the cost on my taxes? 

If you were prescribed Ozempic for your diabetes, you can claim your expenses for the drug on your taxes as part of your medical expenses on your tax return if you itemize your deductions. 

If you itemize your deductions, you may be able to deduct expenses you paid that year for medical and dental expenses for you and your family (spouse and dependents) – including the out-of-pocket cost of your prescription Ozempic. But it’s important to note that you can only deduct the amount of your total medical expenses that exceed 7.5% of your adjusted gross income (AGI). For instance, if your adjusted gross income was $50,000 your medical expenses would need to be more than $2,500 ($50,000 x 7.5%). 

If I use Ozempic for weight loss, can I deduct the cost on my taxes?

Although Ozempic is not approved by the FDA for weight loss, many people are taking it to lose weight and in some cases physicians are prescribing it for weight loss. According to the IRS, weight loss programs just for the sake of losing weight are not deductible unless the program treats a specific disease diagnosed by a physician like obesity, diabetes, hypertension, or heart disease. If your doctor prescribed Ozempic to help lose weight to treat a specific disease then you may be able to deduct your cost.

If I use Wegovy, can I deduct the cost on my taxes?

The Food and Drug Administration approved Wegovy to treat obesity and to treat weight-related conditions like high blood pressure and diabetes. If your doctor prescribes Wegovy to treat a specific disease like obesity, diabetes, hypertension, or heart disease, then you can deduct the cost on your taxes as long as you itemize your deductions and the costs are more than 7.5% of your adjusted gross income. However, if you purchase Wegovy because you want to start dropping some pounds, then you will not be able to deduct it.

What are medical care expenses? 

The IRS defines medical care expenses as “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.” 

What medical expenses are tax deductible?

Generally, medical expenses will vary and some examples include but are not limited to the following

  • Payments for fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners
  • Payments to participate in a weight-loss program for a specific disease or diseases diagnosed by a physician including obesity. Note: this does not include ordinary payments for a diet food item or payment for your gym or health club dues.
  • Payments for insulin and for drugs that require a prescription for its use 

How do I qualify for the medical expenses deduction? 

To take a deduction for medical expenses on your tax return you must itemize your expenses and your total eligible medical expenses must exceed a certain threshold. The threshold is 7.5% of your adjusted gross income (AGI). That means you can take a deduction for the amount of medical expenses that exceeds 7.5% of your AGI. 

Don’t worry about knowing these tax rules. Meet with a TurboTax Full Service Expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind.

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Katharina Reekmans
Katharina Reekmans

Katharina Reekmans is an Enrolled Agent and a contributor to the TurboTax Blog team. Katharina has years of experience in tax preparation and representation before the IRS. Her passions surround financial literary and tax law interpretation. She has a strong commitment to using all resources and knowledge to best serve the interest of clients. Katharina has worked as a senior tax accountant, operations manager, and controller. Katharina prides herself on unraveling tax laws so that the average person can understand them. More from Katharina Reekmans

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