Can health insurance be deducted from my taxes?

Answer: Yes, it’s possible*

According to the IRS Website, health insurance can be deducted under certain special situations:

 

  • Pre-Tax premiums are not deductible, since they’re already income tax-free.
  • For most people, After-Tax payments may be deductible on any medical expenses for any cost over 10% of your adjusted gross income, and over 7.5% for seniors.
  • Medicare Premiums on Part B, Part C and Part D are also eligible for deductions. Medicare Part A is deductible if you voluntarily enroll, and are not already covered under Social Security.

If you’re employed, and are covered under a company, Box 1 of  your W-2 should show how much your after-tax contribution was — if you had any.

As always rules can change on us, and this information may not be up-to-date so always do your research and check with the IRS website to make sure you have all your bases covered.

As of early 2015, these are the additional considerations regarding tax and dental deductions:

“Deductible medical expenses may include but are not limited to the following:

  • Payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners
  • Payments for in-patient hospital care or nursing home services, including the cost of meals and lodging charged by the hospital or nursing home
  • Payments for acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction, for participation in a smoking-cessation program and for drugs to alleviate nicotine withdrawal that require a prescription
  • Payments to participate in a weight-loss program for a specific disease or diseases diagnosed by a physician, including obesity, but not ordinarily payments for diet food items or the payment of health club dues
  • Payments for insulin and payments for drugs that require a prescription
  • Payments made for admission and transportation to a medical conference relating to a chronic disease that you, your spouse or your dependents have (if the costs are primarily for and essential to necessitated medical care). However, you may not deduct the costs for meals and lodging while attending the medical conference
  • Payments for false teeth, reading or prescription eyeglasses or contact lenses, hearing aids, crutches, wheelchairs, and for guide dogs for the blind or deaf
  • Payments for transportation primarily for and essential to medical care that qualify as medical expenses, such as payments of the actual fare for a taxi, bus, train, ambulance, or for medical transportation by personal car, the amount of your actual out-of-pocket expenses such as for gas and oil, or the amount of the standard mileage rate for medical expenses, plus the cost of tolls and parking fees
  • Payments for insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy covering qualified long-term care services. However, if you are an employee, do not include in medical expenses the portion of your premiums treated as paid by your employer under its sponsored group accident, health policy or qualified long-term care insurance policy. Also, do not include the premiums that you paid under your employer-sponsored policy under a premium conversion policy (pre-tax), paid by an employer-sponsored health insurance plan (cafeteria plan) or any other medical and dental expenses unless the premiums are included in box 1 of your Form W-2 (PDF), Wage and Tax Statement. For example, if you are a federal employee participating in the premium conversion program of the Federal Employee Health Benefits (FEHB) program, you may not include the premiums paid for the policy as a medical expense since they are never included in your gross income.”

Source: IRS Topic 502: Medical and Dental Expenses

*This information is a guide only, it is not legal or financial advice. Always do due diligence to ensure you are not breaking the law.