- Can I Get Back Money for Overlooked Tax Deductions?
- Is the Money I Paid for My Children's Health Insurance Tax-Deductible?
- Can I Write Off Health Insurance I Paid for My Daughter?
- Tax Deductions for Health Care
- Are Premiums for Health Insurance Paid With Pre-Tax Dollars?
- Do Medical Tax Deductions Reduce Your Income Dollar for Dollar?
If rising medical insurance premiums are lightening your wallet, you might be able to get some of it back when you file your income tax return with one of two different tax deductions. When figuring the deductions, you can't include the costs for medical insurance that is paid by your employer or reimbursed.
Self-Employed Insurance Premiums
If you're self-employed, you may qualify to deduct your medical insurance costs as an adjustment to income. To be eligible, the plan must be established under your trade or business, and you cannot be able to get medical insurance through an employer or through your spouse's employer. When figuring the deduction, you can include the costs for yourself, your spouse, your dependents and your children under age 27. However, the deduction cannot exceed your self-employment income for the year.
Claiming Self-Employment Premiums
To claim your self-employment premiums, you have to report the total paid on line 29 of Form 1040. Besides being able to deduct the full amount -- as long as it does not exceed your self-employment income -- you also benefit by not having to itemize your deductions to take advantage of the tax break.
Medical Expenses Deduction
If you're not self-employed, you may still be able to use medical insurance premiums to increase your income tax refund. Medical insurance costs count as a qualified expense for the medical and dental expenses deduction, which allows you to write off the amount of your qualified expenses the exceeds a specified percentage of your adjusted gross income. For 2012, the threshold is 7.5 percent, but in 2013 and future years, the threshold increases to 10 percent.
Claiming the Medical Expenses Deduction
To claim the medical and dental expenses deduction, you have to itemize your income tax deductions with Schedule A, meaning you can't claim the standard deduction. On line 1 of Schedule A, enter your total medical and dental expenses, including your medical insurance premiums. On line 2, enter your adjusted gross income. On line 3, enter the threshold based on the specified percentage of your AGI. Finally, on line 4, enter the amount of your qualified expenses that exceeds the threshold as your actual deduction.
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