Health insurance costs can be so great that many people begin to wonder if their cost for coverage can be deducted from their taxes. There are four main situations in which you are allowed to deduct your health insurance payments from your taxes. The first of these situations is if you are self-employed. In this situation, the premiums paid for you and your family members are able to be deducted from your taxes. However, this is limited to family members that are listed on your health insurance plan; those on another plan, such as the plan for a university, cannot have their premiums deducted for tax purposes.
The second situation in which health insurance costs are tax deductible is contributions to a health savings account. In this situation, a limited amount that is contributed to the health savings account is allowed to be deducted from taxes.
The next situation in which health insurance costs are allowed to be deducted from your taxes is when you use after-tax income to pay your premiums. It has to be after-tax income because paying the premiums with before-tax income provides you with a tax benefit. To qualify for deductions using this method, you must fill out the proper paperwork available on the IRS website.
The final situation that allows you to deduct health insurance costs from your taxes is when you pay for Medicare A, B or D premiums. Medicare Part A premiums are only tax deducible if the cost is not covered by social security and the beneficiary was not a government employees. Deducting these amounts from taxes from any of these situations can help save you a lot of money.
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