Is health insurance tax deductible?

Here’s the whole megillah: http://www.irs.gov/publications/p502/index.html

They can be tax deductible. I’m not sure how it works when you’re self-employed, but since the rest of us can pay insurance with pre-tax dollars, it makes sense that people who employ themselves should be able to deduct all premiums.

Health expenses, on the other hand, are not deductible until you have spent more than 10% of your income on medical care. You should get insurance, but more than that, you should do everything you can to help us all get universal health insurance, so no one has to be in the situation you are in.

Daloon; 10% is too high. From the Irs.gov site:

“How Much of the Expenses Can You Deduct?

You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income (Form 1040, line 38).

In this publication, the term “7.5% limit” is used to refer to 7.5% of your adjusted gross income. The phrase “subject to the 7.5% limit” is also used. This phrase means that you must subtract 7.5% (.075) of your adjusted gross income from your medical expenses to figure your medical expense deduction.

Well, I knew it was a standard I have never been able to reach. We came darn close this year, but still, no cigar. I just use the software, so I don’t remember the exact numbers. 7.5% of AGI is still a lot, and especially when you’re young, you will be very unlikely to have expenses like that, unless, of course, your income is really low, too. But an income that low would probably put you into eligibility for Medicaid.

Yes, if you are self employed your health insurance is deductible. It is considered a business expense.

And @gailcalled and @daloon we deducted some medical expenses this year because our daughter was in the hospital so much, but included in medical expenses is also mileage and parking fees and prescriptions, which can all add up also.

@miasmom: Absolutely; I keep a record of the mileage (no parking fees around here,) and out-of-pocket RXs both for my mother and me. I am on Medicare D now for meds but can deduct the deductibles and the premiums (also for Medicare B) which are automatically taken out of my monthly SSS check.

I just have to remember to wade through all the paper work.

Do you know offhand what the deductible for medical mileage is? 18 cents/mile?

@gailcalled it was 19 cents in the first half of the year and 27 cents in the second half…next year it will be 24 cents…

http://www.irs.gov/newsroom/article/0,,id=200505,00.html

@miasmom: Not that the government makes it confusing or anything. Thanks for doing the work.

Yeah, I’m not sure why there is such a huge jump in price difference, maybe related to gas prices…and then maybe they are balancing it out for next year??? I guess that’s what we pay them the big bucks for! :)