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Is Medical Cannabis Card Tax Deductible?

This guide is not financial advice; it’s an educational resource. For guidance about your individual financial plan and tax liability, seek advice from a licensed professional, like a Certified Public Accountant or tax attorney.

  • For some patients in certain financial circumstances, getting a medical marijuana card could offer tax benefits.
  • Even if itemized deductions don’t make sense for your tax situation, medical cannabis can help you reduce your overall healthcare costs by supporting improved wellness and increased quality of life.

Saving money on healthcare is just one of many medical card benefits, in addition to all-natural, easily customizable relief and recovery support.

In this article, we’re zooming in on the potential financial benefits of having a medical card. Are there tax benefits to getting a medical marijuana card? How can medical cannabis help you reduce your healthcare costs?

Unfortunately, the IRS currently doesn’t allow patients to deduct expenses related to medical marijuana care on their federal income tax return. But you should read your state tax code carefully. If your state levies an income tax and allows deductions for medical expenses, you should certainly read the fine print before attempting to deduct costs associated with cannabis treatment.

Since state tax codes vary widely, we’re focusing primarily on the federal income tax and how cannabis can help you reduce your overall medical costs outside of your tax liability. Let’s dive in.

Medical Expenses and Your Taxes

The IRS stipulates that many medical expenses are tax deductible: costs associated with health insurance premiums, long-term inpatient care, and medical devices like wheelchairs are a few examples.

Unfortunately, at present, the IRS does not allow patients to deduct medical marijuana expenses on their federal income tax return. This applies to all of the costs associated with medical cannabis treatment, including:

  • Doctor visits
  • Blood tests ordered by medical cannabis doctors
  • Guided medical cannabis sessions with counselors
  • Medical cannabis products purchased lawfully at dispensaries or pharmacies

While major changes to the tax code (like income brackets) are under the purview of the US Congress, the IRS does make minor changes to tax procedures and definitions each year. So, be sure to check the tax code each year for updates before filing.

Standard Deduction vs. Itemized Deduction

Before you worry about totaling your medical expenses to deduct them from your taxes, you should try to establish whether or not it makes sense to do so. There are two ways to decrease your taxable income on your tax return each year:

  • The standard deduction: The IRS allows taxpayers to deduct a flat amount from their total income each year. This amount can change; in 2023, the standard deduction for single people or married people filing separately was $13,850, a $900 increase from the previous year’s standard deduction.

Not everyone is eligible for the standard deduction, but most taxpayers are. This is the simplest route to take when filing your taxes and doesn’t require you to list and total your various deductible expenses (medical or otherwise).

  • The itemized deduction: Instead of taking the standard deduction, you can instead make a list of your deductible costs, total them, and deduct this from your taxable income. Itemized deductions require taxpayers to complete an additional form.

If you’re taking the standard deduction on your tax return, there’s no need to total your medical expenses. If you’re itemizing your deductions, you’ll need to make a list of the items you intend to deduct and complete an additional form.

Itemized Deduction: When It Makes Sense to Do the Math

Simply put, it doesn’t always make sense to take an itemized deduction instead of a standard deduction. If your itemizations don’t exceed the standard deduction amount for your tax classification (i.e., single, married filing jointly, or head of household), taking the standard deduction (if you’re eligible to do so) is certainly the simpler route. However, there are some potential scenarios where it makes sense to itemize.

Here are a few groups that might be able to decrease their tax liability by itemizing:

  • People who are self-employed or independent contractors who pay for their own health insurance premiums and medical care
  • People who aren’t insured and pay a substantial amount out of pocket for medical treatments
  • People whose overall deductible costs are high—those who require expensive medical care, make ample alimony payments, contribute the maximum amount to their IRAs each year, donate significant sums to charity, or contribute the maximum amount to their HSAs.

The only sure-fire way to know if you’d benefit from an itemized deduction is to run the numbers yourself. Talk to a tax expert, like a Certified Public Accountant (CPA), for the most up-to-date and accurate information.

Are There Other Financial Benefits to Getting a Medical Card?

Until medical cannabis becomes a deductible expense, you can take advantage of other financial benefits of medical marijuana treatment. Let’s explore a few hypotheticals.

Lower Prescription Drug Costs

Many patients use medical cannabis as a replacement for prescription drugs like:

  • Muscle relaxers
  • Opioids and other prescription pain relievers
  • Antidepressants
  • Anti-anxiety drugs

While medical cannabis isn’t an appropriate replacement for every prescription drug out there, it can offer an all-natural, plant-based, and highly customizable alternative to many mainstream pharmaceuticals.

Depending on your insurance status and your monthly drug costs, replacing some of your medications with cannabis (with guidance from a doctor, of course) could help you save at the pharmacy.

Fewer Doctor Visits

Since cannabis can help support a wide variety of health goals, you might find that your doctor’s visits will decrease once you start medical marijuana treatment.

Let’s explore a hypothetical:

  • Gail is a 35-year-old abuse survivor who is living with PTSD. She visits a general practitioner once per year for a check-up. She also visits a psychiatrist once every three months to refill prescriptions for psychiatric medications and has a monthly session with a cognitive behavioral therapist to learn coping strategies.
  • Gail talks to her doctors and decides to transition away from psychiatric medications to medical cannabis. She weans off of prescription drugs and finds cannabis products that work for her needs and lifestyle.
  • No longer on psychiatric medications and feeling confident about her recovery path, Gail stops seeing her psychiatrist and sees her counselor quarterly instead of monthly. She sees her medical cannabis doctor as needed.

With support from cannabis-informed providers, Gail decreased her overall frequency of doctor visits, and this kind of situation is a reality for many medical marijuana patients.

Overall Wellness and Quality of Life Improvements

Simply put, it’s cheaper to be healthy: fewer doctor visits, over-the-counter medications, medical devices, and prescription drugs can help you cut living expenses.

Luckily, medical cannabis can support a wide variety of health outcomes that can help you reach the goals above:

  • Improved sleep hygiene
  • Reduced muscle soreness and chronic pain
  • Mood balance
  • Healthy appetite and thirst
  • Decreased muscle spasms
  • Relief for (and even recovery from) psychiatric conditions like anxiety, PTSD, and depression

Overall, medical cannabis offers broad applications, and treatments are highly customizable. If you’re looking to transition to a more affordable, plant-based treatment course, TeleLeaf can connect you with a medical cannabis doctor to start your journey.

Keeping Costs Low with Medical Cannabis: Tips from Experienced Patients

In addition, it’s easy to tweak your medical cannabis spending and keep your costs down with a few simple strategies:

  • Buy in bulk: Once you find a product you like, consider buying it in bulk. You’ll decrease your overall trips to the dispensary or pharmacy and get access to bulk discounts.
  • Take tolerance breaks: Over time, you can develop a tolerance to cannabis. By taking occasional tolerance breaks (periods of decreased consumption), you can help keep your dose and your costs consistent.
  • Join loyalty programs and find sales: To reward customer loyalty and move products faster, many dispensaries offer discounts you’re familiar with: rewards points and seasonal sales, for instance. Take advantage of these when you can to reduce your overall costs.

TeleLeaf: Supporting You on Your Healing Journey

While medical cannabis may not be tax-deductible at the federal level yet, there are many other potential financial benefits to choosing medical marijuana over mainstream pharmaceutical treatments (when appropriate).

And if you’re looking for a reputable partner in cannabis medicine, TeleLeaf is here to help. We’ve seen the revolutionary results of medical marijuana treatment firsthand, and we can connect you with the licensed providers you need to start your journey on the right foot.

Reach out to us to make your first appointment and discover the all-natural, plant-based recovery you deserve.


Sources:

Tampa Bay Times. Blunt Truths About Medical Expenses, Marijuana and Your Tax Return
https://www.tampabay.com/news/business/2020/02/13/blunt-truths-about-medical-expenses-marijuana-and-your-tax-return/

Internal Revenue Service. Publication 502, Medical and Dental Expenses
https://www.irs.gov/publications/p502

Internal Revenue Service. Tax Code, Regulations, and Official Guidance
https://www.irs.gov/privacy-disclosure/tax-code-regulations-and-official-guidance

Internal Revenue Service. Standard Deduction
https://apps.irs.gov/app/vita/content/00/00_13_005.jsp

Internal Revenue Service. Topic No. 501, Should I Itemize?
https://www.irs.gov/taxtopics/tc501

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