Is a health insurance premium tax-deductible?

Written by cameron easey
  • Share
  • Tweet
  • Share
  • Email

Premiums paid for health insurance can be tax-deductible depending on what is required for the tax return. Most medical expenses that are paid -- whether they be monthly premiums, deductibles or other out-of-pocket expenses -- can generally be deducted from federal taxes. Federal tax returns only allow a certain percentage of medical expenses on an individual tax return.

Other People Are Reading

Self-Employment

If an individual is self-employed, the cost of health insurance can be deducted on a federal tax return. A self-employed individual may be able to deduct up to 100 per cent of the amount paid for medical insurance. This deduction needs to be an adjustment to income and a self-employed individual needs to have a net profit for the year. Additional premiums or other medical expenses can be included as an itemised deduction on the return.

Private Health Insurance

Premiums paid for private health insurance can also be tax-deductible. The premiums for medical insurance and other expenses need to be included as itemised deductions on the tax return. In addition, a tax benefit will only be obtained if expenses exceed 7.5 per cent of an individual's adjusted gross income (AGI). This means that 7.5 per cent of AGI is deducted from the total amount of health insurance premiums paid to obtain the amount of the deduction.

Health Savings Accounts

Individuals that use a health savings account for medical expenses can deduct the amount of contributions they make on their tax return. Contributions made by an employer cannot be deducted on taxes but can be excluded from an individual's gross income. This means that these contributions are not included as income when filing a tax return.

Long-Term Care Insurance

Premiums that are paid for long-term care insurance are included in medical expenses that can be deducted on a tax return. The amount of the deduction that can be claimed is based on an individual's age. Currently the maximum amount that can be deducted is £2,002 for individuals age 61 through 70 years old. The amount of the deduction increases to £2,502 for individuals who are over 70.

Expenses for Relatives

An individual, such as a baby boomer, who pays medical expenses and premiums for family members may be able to deduct these costs on her taxes. The premiums need to be paid for immediate family members, such as a child, son- or daughter-in-law, mother and father. Other family members include a mother- or father-in-law as well as nieces and nephews. An individual would have had to pay more than half of a family member's support the previous year to deduct the premium payments on her tax return.

Don't Miss

Filter:
  • All types
  • Articles
  • Slideshows
  • Videos
Sort:
  • Most relevant
  • Most popular
  • Most recent

No articles available

No slideshows available

No videos available

By using the eHow.co.uk site, you consent to the use of cookies. For more information, please see our Cookie policy.