Taxpayer asks:
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.
Taxgirl says:
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.
(NOTE: Post-TCJA, the threshold is 10% instead of 7.5%.)
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!
Good luck!
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
This is good advice. I don’t think most people realize that you can deduct health care expenses over a certain amount.
This post should save some of your readers a bit of money.
Thank you so much for writing on this tpoic. My brother and sister-in-law own their own pottery and company, and may or may not have known this. ! I will see that they get this information
Thanks Again
Diane
In the example, what qualifies as an ‘expense’ for to reach the 7.5% minimum. For example if I have two separate hospital visits each being 2k, can I count that as reaching the 3k minimum by summing together? Also, you could apply the same example to medical premiums if a person has two or more medical plans in the same year. So can you add the cost of multiple medical plans to reach the minimum?
It is best not to forget other issues for unemployed folks. Penalties for taking money out of retirement plans to cover expenses over the same 7.5% can be waived. I would never recomend doing this however, the loss of value over time is too great.
I am now self-employed and I am paying monthly medical insurance on a cobra-conversion plan. It has been almost 4 yrs now. Can that be deducted on p1, self employed ins, line 29 of 1040, along with my childrens policy payments on a different individual policy?
can I deduct my medicare pay ments that are taken out of my Social sec. check?
Fran, If you itemize, yes.