What amount of insurance premiums are tax-deductible?

For example, you can deduct the amount you spent on your health insurance premiums if your total health care costs exceed 7.5% of your adjusted gross income (AGI) or if you are self-employed. Health insurance premiums are deductible from federal taxes, in some cases, because these monthly payments are classified as medical expenses. Usually, if you pay for health insurance on your own, you can deduct the amount from your taxes. Your income and how you get your insurance help determine if costs are eligible for tax deductions.

All health insurance premiums you pay out-of-pocket for policies that cover health care are tax-deductible. Health care policies cover treatments including hospitalization, surgery and x-rays; prescription drugs and insulin; dental care; loss or damage to contact lenses; and long-term care, with some limitations. If you list your deductions for a taxable year in Schedule A (Form 1040), Itemized Deductions, you may be able to deduct the expenses you paid that year for medical and dental care for you, your spouse, and your dependents. You can only deduct the amount of your total medical expenses that exceeds 7.5% of your adjusted gross income.

Calculate the amount you are allowed to deduct on Schedule A (Form 1040). Even if you're not self-employed, the Internal Revenue Service (IRS) allows you to count medical and dental insurance premiums (and, with some limitations, long-term care insurance premiums) as part of the 7.5% of your adjusted gross income (AGI) that must be spent on health care before any out-of-pocket expenses are spent can deduct medical expenses. In addition, to deduct medical expenses, including health insurance, from your taxes, your total medical expenses must exceed 7.5% of your AGI and you can only deduct the amount greater than that 7.5%.

Geneva Lattig
Geneva Lattig

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