Are Health Insurance Premiums Tax Deductible?
Is it possible that health insurance premiums are deductible on your taxes? Chances are, if you’re self-employed, you may be able to deduct those monthly premiums right off your taxes every year. There may be other circumstances in which health costs are deductible as well, even if you’re not someone who is self-employed.
For most of those who are self-employed, the money you pay out to maintain health care coverage for yourself and your family counts as a deductible work-related expense. They are not deductible if you or others in your family are already receiving coverage under another plan, such as that offered by a spouse’s employer.
For those who are not self-employed, but insteaad work for a company which offers a health savings account, or HSA, these expenses may also be tax deductible. The amount which you contribute personally into your HSA can be deducted up to a certain dollar amount, which differs for families vs. individuals. Since HSA contributions are often collected pre-tax, this benefit can pack double benefit for families on a budget.
Even if you don’t have access to an HSA which is offered by an employer, and you are not self-employed, you might still be able to deduct health and dental expenses from your taxes. The IRS has provisions for deducting your health care expenses under certain circumstances, including your monthly health insurance premiums. The expenses must total more than a certain percentage of your income. Check with the IRS website for specific rules, as the tax guidelines often change from year to year.
Examples of what health care expenses may be deducted are many and fairly generous. Out-of-pocket expense for personal health items which are medically necessary but may not be fully covered by insurance are one example, such as contact lens solution, or an over-the-counter supplement which is taken at your doctor’s recommendation. Optional health care procedures like LASIK eye surgery can also be deducted, as well as costs for prescription medications.
Remember, before deducting any health care expenses from your taxes, check with your tax accountant in order to make sure your deductions are compliant with current regulations.