Taxpayer asks:
Hi Taxgirl…
Quick question…I live in CA
My current employer, as part of his benefit plan, pays for my medical insurance. If I want to get medical for the rest of my family, I have to pay extra.
According to someone who works here, they claim that is deductible as a medical expense under Schedule A…is that correct?
Just wondering…
Let me know at your convenience
Love the site…keep up the great work!
Taxgirl says:
Absolutely! You can claim the cost of the “extra” health insurance as a deduction on Schedule A so long as the expenses are for you, your spouse and/or your dependents.
Those expenses aren’t just limited to health insurance for your family. Click here for a prior post which lists other health care related expenses that would qualify for the medical deduction.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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I just want to say that I really enjoy you website. I work for a tax prep company and just have a comment about your post on health insurance and the schedule A. The payments are deductable as long as they are not paid with pre-tax dollars.
Keep up the good work on informing tax payers.
Excellent point, thanks for the clarification! The payments are only deductible if made with after-tax dollars. I was assuming that most plans work that way but it could well be the case that pre-tax dollars are used.
And I’m glad that you enjoy the site… Thanks much.
Kathy has a good point, if those payments are paid under a section 125 plan, the taxpayer has already received the “deduction” without having to meet the 7.5% threshold. A test to see if these are Sec. 125 is; must you commit to paying this premium for the entire year without an intervening event, such as marriage or divorce (there are others too) if you must commit to paying this premium for an entire year then it is likely to be under a Sec. 125 plan. This is common for optional dental or vision plans where the company may offer a group plan but the employee pays the entire insurance cost. By the way, the section 125 is a real good deal for it not only saves income tax but FICA and Medicare tax too (this is why employers like it).
Thanks for the clarification!!! Helps immensely!
Love the site Taxgirl!!
Late to the party here but wanted to point out though it is deductible, you still may not actually get the deduction. Medical itemized deductions have a floor of 7.5% of your AGI (adjusted gross income) so you only get a deduction for amounts in excess of that.
For example, if your AGI is $50,000 and you have out of pocket medical expenses of $4,000, you only get to deduct $250 ($50,000 x 7.5% = $3,750: $4,000 – $3,750 = $250.)
The higher your AGI, the higher the floor, the less medical expense you get to deduct. The average taxpayer rarely gets to deduct medical expenses unless they have a substantial amount of medical costs in one year, like a surgery not covered by medical insurance.
Bummer.