Question

Are health insurance premiums deductible? I want to deduct health insurance premiums from my tax return but I did not want to itemize.

Answer

Health insurance premiums are deductible if you itemize your tax return. Itemizing your medical expenses allows you to deduct health insurance premiums and the premiums you paid for the following types of insurance:

  • Health
  • Dental
  • Vision
  • Qualified long-term care insurance
  • Most Medicare

If you paid the premiums for a policy you obtained yourself, you can deduct your out-of-pocket costs.

If your insurance is through your employer, you can only deduct these:

  • Amounts you paid with after-tax funds
  • Medical expenses that are more than a certain percentage of your adjusted gross income (AGI). Depending on your age and the tax year, this percentage is either:
    • 10% of your AGI
    • 7.5% of your AGI

If you have pre-tax amounts withheld from your paycheck for your insurance, the amount on your W-2, Box 1 won’t include the cost of your health insurance. So, your income will already be adjusted for the cost of health insurance.

 

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