Are health insurance costs deductible?

Question

I am divorced and cover my two children on my insurance. Is that cost deductible on my Federal return?

Answer 1

Normally the amount of money you pay as insurance premiums for health insurance is not deductible.

However, if you are a small business owner paying health insurance premiums for your employees and you use a tax advantaged plan like an HSA...you may be able to get certain tax breaks on your business' taxes.

But on personal income taxes you are not allowed to take a deduction on the amount you spend on health insurance premiums.

You can deduct certain medical expenses in excess of 7-1/2 percent of your gross adjusted income (AGI).

Answer 2

If you are self-employed...then you can deduct the premiums on Form 1040 Page one...up to the amount of your net self-employment income. Any amount not deductible here can then be added as a deduction on Schedule A. If you are an employee of a company...then it depends. If the employer pays all of the premiums....then none of the amount is deductible on your tax return. If you pay part of the premiums...then you may deduct the part you pay on Schedule A of your tax return. On Schedule A of your return, medical expenses must add up to over seven and one half percent of your adjusted gross income...before any of the expenses are deductible. Therefore, you often have to have a lot of medical expenses (including deductible medical insurance premiums) before any of your medical expenses actually get to be part of your bottom line Schedule A deductions.

Answer 3

The premiums you pay for health insurance are not deductible. A certain percentage of costs NOT already coverd by insurance is deductible if over a set limit. Schedule A instructions explain this.

Answer 4

If you are a business owner... YES. Even the premiums are.

If you are not then you can only put your bills towards a tax deduction using "schedule A" and your tax preparer will tell you if your deductions meet the limit.

Answer 5

Nobody bothered to ask if 1.) you were employed; 2.) you were paying these premiums via pre-tax payroll deductions; and 3.) if you qualify, will you pay more than 7.5% of your AGI (adjusted gross income) in medical expenses. Once those questions are answered, then your question can be resolved.

Answer 6

Health insurance premiums are only deductible, I believe, if you are self employed. Your medical bills are deductible.

Answer 7

No. The monthly premium for health insurance is NOT a deductible medical expense. Any actual medical costs that you incur, that are OVER 7% of your income, IF you itemize, are deductible.

Don't confuse "medical bills" which are deductible (if you itemize, and if they are more than 7% of your income - the first 7% worth of medical bills are NOT deductible), with INSURANCE PREMIUM, which is not.

Answer 8

I think you deduct medical bills if they are over a certain amount per year. Our accountant said if the amount was over $4,500, then we could start looking into deducting.

Answer 9

This is what the IRS says about it:

"Whose medical and dental expenses can you include?
You can include medical and dental bills you paid for:
Yourself and your spouse.

All dependents you claim on your return.

Your child whom you do not claim as a dependent because of the rules for children of divorced or separated parents.

Any person you could have claimed as a dependent on your return except that person received $3,300 or more of gross income or filed a joint return.

Any person you could have claimed as a dependent except that you, or your spouse if filing jointly, can be claimed as a dependent on someone else's 2006 return."

Answer 10

I would suggest you open a HSA account, consult your CPA or the Internal Revenue Service.