When Can You Claim a Tax Deduction for Health Insurance (1440 x 600)

When Can You Claim a Tax Deduction for Health Insurance?

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Claiming medical and dental tax deductions can lead to big savings – if you had major out-of-pocket expenses or your income was lower than expected.

 If you itemize your deductions, you can only deduct the amount of your total medical and dental expenses that exceed 7.5% of your annual adjusted gross income. Self-employed individuals can deduct 100% of medical and dental costs, including premiums.

The IRS allows deductions for out-of-pocket expenses for medical, dental, and vision care, prescription drugs and insulin, wellness programs, travel costs for medical care, and much more. You must have paid for the expenses in the taxable year.

In some cases, you can deduct insurance premiums for policies that cover medical care and some qualifying long-term care insurance. But you can’t deduct the premium amount paid by your employer or an advanced tax credit from the Health Insurance Marketplace.

Be aware, though, that there’s no double dipping. You can’t deduct amounts paid into tax-free health saving accounts (HSA) and flexible spending accounts (FSA).  You also can’t claim a deduction if the bill was paid by your insurer.

Deducting medical expenses can lower your modified adjusted gross income, which can protect you from having to pay back tax credits when filing your taxes because you lost income due to medical expenses.

For a full list of eligible deductions, see IRS Publication 502, Medical and Dental Expenses, and itemize the deductions on Form 1040, Schedule A.

Magaly Olivero
Magaly Olivero

Written by Magaly Olivero

Magaly Olivero is an award-winning writer and has written for many national and regional media outlets, as well as corporate and nonprofit clients in the healthcare, tax and education industries. Her publishing credits include U.S. News and World Report, Newsweek, The New York Times, Working Woman, Better Homes and Gardens and the Connecticut Health Investigative Team. Magaly is a recipient of a National Journalism Fellowship from the University of California Annenberg School of Communication and a Health Coverage Fellowship from the Blue Cross Blue Shield of Massachusetts Foundation.

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