The information in this article is up to date for tax year 2024 (returns filed in 2025).
Are you feeling the pressure from rising health insurance premiums? You’re not alone. As medical expenses climb, many taxpayers are left wondering if health insurance premiums are tax deductible. Fortunately, your premiums and other medical expenses may be tax-deductible if you meet certain criteria. Here’s what you need to know.
What are health insurance premiums?
Health insurance premiums are monthly fees you pay to your insurance provider to get coverage for medical expenses. This includes doctor visits, hospital stays, pregnancy and childbirth, mental health services, prescription medications, and more. Your health insurance premiums are typically calculated based on five factors:
- Your age
- Location,
- Tobacco use
- Individual or family enrollment
- The level of coverage chosen
Health insurance premiums can be paid by you (the policyholder), your employer, or the federal government (if you have Medicare or Medicaid). Generally, purchasing your own plan is more expensive than getting coverage through your employer or a government program. Factors like gender or medical history are not considered in calculating premiums.
What does it mean for an expense to be tax deductible?
When an expense is considered tax deductible, it means that the amount can be subtracted from your taxable income, potentially lowering the amount of taxes you owe. Tax deductions are available for certain expenses that are deemed necessary for health, business, or other purposes.
Are health insurance premiums tax deductible?
The short answer is: It depends. Your health insurance premiums can be tax deductible based on different factors including how you get your coverage, whether you itemize your deductions, and how much you spend on medical costs.
Individual health insurance premiums
If you buy your own health insurance, you can usually deduct your premiums if you itemize deductions on your tax return. To qualify, your total medical expenses, including health insurance premiums, must exceed 7.5% of your adjusted gross income (AGI). Picture it this way: If your AGI is $60,000, you would need medical expenses over $4,500 to even start deducting.
Employer-sponsored health insurance
For those of you with health insurance provided by your employer, things look a little different. Generally, if your employer pays for your health insurance premiums or you pay them with pre-tax dollars, you can’t deduct your health insurance premiums.
Self-employed individuals
If you’re self-employed and have a net profit for the year, you get a golden ticket. You can deduct 100% of the health insurance premiums for you, your spouse, and your dependents, even if you don’t itemize deductions. So, whether you have individual coverage or a family plan, those premiums can help you save on taxes.
What health insurance premiums can be deducted?
If you’re covering your own healthcare costs, you can deduct the following premiums:
- Medical insurance
- Dental insurance
- HMO membership
- Medicare (Parts A, B, C and D)
- Long-term care insurance, up to a certain annual limit based on age
What insurance premiums are not tax deductible?
While many health insurance premiums are tax-deductible, there are certain types of coverage that do not qualify for this tax benefit. You cannot include the premiums you pay for:
- Life insurance
- Policies covering the loss of life, limb, sight, etc.
- Income protection policies
- The portion of your auto insurance that covers medical insurance for everyone injured in or by your car.
- Any amounts used to claim the self-employed health insurance deduction on Schedule 1 (Form 1040).
- Any additional premiums you pay for adding a nondependent under age 27 to your policy.
- Medical expenses reimbursed by:
- Insurance
- Flexible Spending Arrangements (FSAs)
- Health Savings Accounts (HSAs)
- Medical Savings Accounts (MSA)
How much can you deduct for long-term care premiums?
For tax year 2024, the amount of qualified long-term care premiums you can include is limited to:
- 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
What other medical expenses are tax-deductible?
In addition to health insurance premiums, there are various other medical expenses that may be tax-deductible. Some eligible expenses are:
- Dentures
- Breast pumps and supplies
- Eyeglasses and contact lenses
- Fertility treatments
- Hearing aids
- Psychiatric care
- Vasectomies
- Wheelchairs
For a full list of tax-deductible medical and dental expenses, check out IRS Publication 502.
Keep track of everything
To ensure you are maximizing your tax deductions for health insurance premiums and other medical expenses, it is important to keep thorough records of all expenses. Create a tax folder and keep receipts, statements, and documentation of payments made. This will make it easier for you to claim your deductions come tax time. Want to ensure you don’t miss anything? File your taxes with ezTaxReturn. We guide you step-by-step to maximize your tax deductions and catch overlooked credits. So, you get your biggest possible refund, guaranteed.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
