Last year, I lost my job. I haven’t found a full time job yet so I have been paying for my health insurance out of pocket by COBRA.
Is this deductible on my taxes? A friend told me that it was but I thought only visits to the doctor and prescriptions were.
Thanks for any help you can give me. It’s a tough time and any money that I can save is good.
I’m sorry to hear about your job situation! I know there are a lot of folks in similar boats these days. Hopefully, the economy will turn around sooner rather than later…
As to your question, absolutely yes! Health insurance premiums which are not reimbursed by an employer are definitely deductible, provided that you otherwise qualify (meaning that you itemize your deductions on a Schedule A).
It’s important to note that the expenses are only deductible to the extent that they exceed 7.5% of your adjusted gross income. So, for example, if your AGI was $40,000, you can only deduct expenses which exceed $3,000 (7.5% of $40,000). Of course, when it comes to health insurance premiums, you’re likely to hit that number more often than not.
And please don’t think that only visits to the doctor and prescriptions are deductible! There are a host of medical and dental expenses that you can deduct. Check out this list of deductible medical and dental expenses – I’m sure that you’ll find some that you can use!
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.
Have a question? Ask the taxgirl!