USA Health Insurance Premiums

[Amaury1070]

I retired 3 years ago at age 60. I collect a pension from my Union. I've been paying $1400 per month for my families health insurance. This is deducted right from my pension check each month along with federal taxes. At the end of the year all my pension benefit is taxed and reported (not excluding my health costs). Can I deduct my costs for health insurance from my taxes? If so, how do I deduct the two prior years of payments.

 

[AGH the CPA]

To the best of my knowledge, absent any other information, you cannot deduct the costs for your health care premiums. (if only!)

 

[Drmdcpa]

Medical insurance premiums are deductible in many different ways. In this case it sounds like the would fall under Schedule A itemized deductions.

Whether they give you a tax benefit or not is another story.

 

[Amaury1070]

To the best of my knowledge, absent any other information, you cannot deduct the costs for your health care premiums. (if only!)

absent of what information? The post that follows yours claims I can under my circumstances. I don't receive any discounts or assistance in any way. Its deducted from my pension check, but my tax statement reflects the gross pension amount for tax purposes. I give half of my pension check just to keep my family insured yet I have to report the full amount of my pension including the $1400 the take out each month....

 

[Drmdcpa]

If it is taken out pretax, it is not deductible, otherwise it should be on one form or the other.

 

[Amaury1070]

If it is taken out pretax, it is not deductible, otherwise it should be on one form or the other.

How can I tell if its pre-tax? They deduct $181 for federal Income taxes along with my $1400 medical insurance payment monthly. My monthly gross is $3103, my net is $1509 monthly. When I receive my 1099-R, Box 1 (gross distribution)) is $37,000 and Box 2a (taxable amount) is $37,000.

 

[Drmdcpa]

From the sounds of it, it is not pre tax because gross and taxable are the same.

 

[Amaury1070]

From the sounds of it, it is not pre tax because gross and taxable are the same.

Thank you, Didn't want to take the deduction and possibly get audited, been through one in the past and it was brutal... I've been missing out on this deduction for the past 3 years. I guess I may have to file a 1040X amended form for 2016 and 2015......

 

[Drmdcpa]

Not a fan of amending but if it is worth it.

 

[Amaury1070]

Not a fan of amending but if it is worth it.

It adds up to over $17,000 per year not counting co-pays, $600 per family per year deductables and portions of bills I paid over and above the insurance paid on items...

 

[Larry Bailey]

Yes, you can deduct your health insurance premiums but there is a limit. You can deduct only the amount of medical expenses that exceed 7.5% of you adjusted gross income. For example, if your AGI was $60,000, you can deduct medical expenses that exceed $4,500 (7.5% of $60,000 is $4,500). If you paid $13,000 in premiums and deductibles and co-pays, you can deduct $$8,500 ($13,000 less $4,500)

Below is the language from the IRS...and this is the link:

https://www.irs.gov/taxtopics/tc502

Deductible medical expenses may include but aren't limited to the following:......
Payments for insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy covering qualified long-term care services. However, if you're an employee, don't include in medical expenses the portion of your premiums treated as paid by your employer under its sponsored group accident, health policy, or qualified long-term care insurance policy. Also, don't include the premiums that you paid under your employer-sponsored policy under a premium conversion policy (pre-tax), paid by an employer-sponsored health insurance plan (cafeteria plan) or any other medical and dental expenses unless the premiums are included in box 1 of your Form W-2.pdf, Wage and Tax Statement. For example, if you're a federal employee participating in the premium conversion program of the Federal Employee Health Benefits (FEHB) program, you may not include the premiums paid for the policy as a medical expense