Is Health Insurance Tax Deductible?

Whether you can deduct your health insurance costs depends on factors like your employment status, how you pay your premiums and if you choose to itemize your deductions. Understanding these rules can help you save money when tax season arrives.

Health insurance premiums can take a significant chunk out of your budget — but is health insurance tax deductible? Here’s what you need to know.

Can Employees Deduct Health Insurance Premiums?

Health insurance consistently ranks among the highest costs for average Americans. However, employees typically can’t deduct health insurance premiums because these costs are usually paid pre-tax directly from their paychecks. However, there are exceptions.

Employees might deduct their premiums if:

• Premiums were paid with after-tax money.
• They itemize deductions on Schedule A (Form 1040).
• Total medical expenses, including premiums, exceed 7.5% of their Adjusted Gross Income (AGI).

Not sure how your premiums are paid? A quick look at your paycheck stub or a conversation with your HR department can clear things up.

Are Self-Employed Health Insurance Premiums Deductible?

If you’re self-employed, you have more flexibility. You can deduct premiums as long as:

• The insurance policy is in your name or your business’s name.
• You’re not eligible for another employer-sponsored plan.
• Your deduction doesn’t exceed your net business income.

Report this deduction directly on Schedule 1 (Form 1040), even if you don’t itemize other expenses.

What Health Insurance Premiums Qualify?

Here’s a quick rundown of health insurance premiums that you can usually deduct:

• Medical insurance
• Dental insurance
• Vision insurance
• Medicare premiums (Parts B, D and Medicare Advantage)
• Long-term care insurance premiums (subject to age limits)

2024 Long-Term Care Premium Deduction Limits:

• Age 40 or younger: $470
• Age 41-50: $880
• Age 51-60: $1,760
• Age 61-70: $4,710
• Age 71 or older: $5,880

Which Health Expenses Are Not Deductible?

Unfortunately, you can’t deduct premiums for these types of insurance:

• Life insurance
• Disability insurance
• Coverage for loss of income due to sickness or injury
• Premiums already paid pre-tax via payroll

How to Claim Your Health Insurance Deduction

Depending on your situation, here’s how to claim your deduction:

• Employees: Itemize your deductions on Schedule A, Form 1040, ensuring medical expenses exceed 7.5% of your AGI.
• Self-Employed: Deduct directly on Schedule 1, Form 1040, without needing to itemize.

Always keep clear documentation, like Forms 1095 and 1098, plus receipts for all expenses.

Common Mistakes to Avoid

When deducting health insurance premiums, be careful to avoid these common pitfalls:

• Double dipping: Don’t deduct pre-tax payroll deductions again.
• Using incorrect forms: Always verify you’re filing the right IRS forms (Schedule A or Schedule 1).
• Missing records: Keep detailed records to substantiate your claims.

Final Take to Go

Knowing when and how to deduct your health insurance premiums can save you money at tax time. Remember these key points:

• Deduct premiums if you itemize and your expenses exceed 7.5% of AGI.
• Self-employed individuals can claim deductions directly (Schedule 1, Form 1040).
• Don’t deduct pre-tax payroll contributions again.
• Keep clear documentation like Form 1095, Form 1098, and expense receipts.
• Remember, life and disability insurance premiums are typically not deductible.

Ready to maximize your deductions? Double-check your eligibility, gather the necessary paperwork and consult a tax professional if needed.

For additional guidance, explore our trusted tax resources or speak with a financial advisor.

Information is accurate as of June 2, 2025.

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