Are Health Care Premiums Tax Deductible?

are health care premiums tax deductible

As tax season nears, many people often wonder whether health care premiums can be deducted. The answer depends on various factors including your employment status (whether self-employed or employee), as well as how much was spent on medical expenses such as premiums throughout the year.

As the IRS indicates, most non-retired Americans receive their group health insurance premiums pretax through their employer and cannot “double dip” and deduct those premiums again when filing taxes. However, self-employed taxpayers may be eligible to deduct these health insurance premiums along with qualified medical expenses as an above-the-line deduction on Schedule A of Form 1040 according to IRS guidance.

To qualify for the health insurance premium write-off, you must possess your own qualifying long-term care policy for yourself and any eligible dependents residing with you for at least a year and be paying premiums that do not exceed your net profit for that year.

Tax breaks for self-employed individuals are among the many advantages offered by the Affordable Care Act’s (ACA) individual health insurance marketplace. Offering plans both on- and off-exchange, as well as premium tax credits for those eligible, it provides individuals with affordable coverage options at all.

Though the Affordable Care Act individual health insurance market differs significantly from traditional employer-sponsored coverage, its premium tax credit and cost-cutting features may make it an appealing option for individuals needing or looking for their own health coverage. Take note of the annual open enrollment period; enroll before Jan 15 to make sure your plan takes effect before it closes up shop for another year! The IRS advises.

Tax deductions can be claimed for various medical expenses, including premiums paid for health insurance policies as well as payments for prescription drugs, eyeglasses, dental care services, and acupuncture treatments, according to the IRS. Furthermore, business owners can deduct employee health insurance premiums paid as part of their overall medical expense deduction – the IRS provides instructions for doing this on its website – although these updates were previously published here by AskFlossie.