Health Insurance – Can You Claim Tax Deductions ?

Health insurance plays a major role in many people’s lives. Buying a health insurance policy for you and your family may help you by leaps and bounds in the times of unforeseen incidents or accidents. In this generation, more and more people are looking forward to having a health insurance policy for them to make sure that the unexpected scenarios in life will be taken care of, without any financial distress. When it comes to protecting your health by having a health insurance policy, a lot of people are confused whether they can claim tax deductions on their health insurance policy premiums.

Usually health insurance policies are not very cheap, which is why, it would be great if you can claim tax deductions on at least some part of your health insurance policy premiums, if not completely. Although you can claim tax deductions on your health insurance policy premiums, there are certain rules and regulations that you should follow, in order to be eligible for the tax deductions on your health insurance. Make sure that you meet these qualifications, so that you can simply claim tax deductions on your health insurance, thus saving some money. Here’s a detailed look on when you can claim tax deductions on your health insurance and when you can’t:

When tax deduction can be claimed on health insurance:

Health Insurance - Can You Claim Tax Deductions ?
Health Insurance – Can You Claim Tax Deductions ?

First and foremost, if you’re a self-employed person, you may be able to claim tax deductions on your health insurance premiums. In case of you being a self-employed person and not qualified for the health plan sponsored by your spouse’s employer, you can simply claim tax deductions on your health insurance premiums. There’s a key thing here, which you must definitely follow; you don’t have the eligibility to write off health insurance premiums more than what you’ve earned.

If you pay your health insurance policy premiums with your own after-tax dollars, you can write off your health insurance premiums on your taxes. For example, if you have bought a health insurance policy through a health insurance company or a health insurance exchange, completely on your own, you can claim tax deduction on your health insurance premiums.

When tax deduction can’t be claimed on health insurance:

The situation of you being ineligible to claim tax deduction on your health insurance premium may involve many reasons. First of all, if you didn’t pay for your health insurance policy, you simply can’t claim tax deductions on your health insurance premiums. If your health insurance policy is paid by your employer, you will be unable to claim tax deduction on your health insurance premiums. But, if your employer pays for only a portion of your health insurance policy, you can still be able to file tax deductions on the part you’ve paid for your health insurance.

Any type of advanced-payment subsidy that helps you lower the expenses of your health insurance premiums are not eligible for tax deductions on your health insurance policy. For example, if you have given a premium tax credit or subsidy to buy a health insurance policy through Health insurance marketplace, by the support of Affordable Care Act, you can’t claim tax deductions on your health insurance policy. But, you can claim tax deductions for the health insurance policy premiums, for which you’ve paid out of your own pocket.

There’s one more important aspect that you should be aware of, which is, you can’t claim tax deductions on your health insurance policy premiums, if you’ve paid for it with your pre-tax money. If you’re insured by your employer, the health insurance policy premiums are usually paid with the money that’s taken out of your paycheck. This process is done even before the calculation of taxes, which makes it pre-tax money. Since the health insurance policy premiums are paid with pre-tax money, which is already income-tax-free, you can’t really claim tax deduction on the health insurance policy premiums paid through this way.

What medical expenses are not taxes deductible?

There are several types of medical expenses that are not tax deductible as well as not supported by the health insurance policies as well. Here’s a look at some of the medical expenses that you can’t claim tax deductions for:

  • Psychiatric care: You can’t claim tax deductions for any type of psychiatric care you undergo. This also includes psychoanalysis and psychologist consultation as well.
  • Weight-loss programs: Any type of weight loss programs or surgeries and invalid for tax deductions. They’re also not eligible for the insurance policies as well.
  • Acupuncture: One of the rapidly growing alternative treatment methods, Acupuncture is unfortunately not eligible for tax deductions as well as health insurance policies.
  • Eye exams & Contact lenses: You won’t be able to claim tax deductions for the money you’ve spent for eye exams and contact lenses. Usually, eye-related health conditions are not supported by the health insurance policies as well.
  • Vasectomy: You can’t write off the expenses you’ve made for your vasectomy.

These are some of the major health expenses that aren’t tax deductible and usually not eligible for any health insurance policies. By now, you may have gotten complete information about when you can really claim tax deductions on your health insurance policy premiums and when you can’t. If you’ve any doubts or queries, feel free to use the contact option.

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