health insurance premiums
I was told by my tax adviser at H & R Block Premium that I could
not list the cost of my health insurance toward the 7.5 percent
of my gross income for a medical deduction. You listed in an answer
to someone's question that you can. Help! My tax person checked
the tax book. Are you in error, or is my tax adviser and her book
P.S. She teaches for H & R Block as well.
Publication 502 clearly states that medical insurance premiums
are a medical expense eligible for deduction as an itemized deduction
subject to reduction by 7.5 percent of your adjusted gross income,
or AGI. The publication states:
can include in medical expenses insurance premiums you pay for policies that cover
medical care. Policies can provide payment for:
surgical fees, X-rays, etc.
- Prescription drugs
of lost or damaged contact lenses
- Membership in an association that
gives cooperative or so-called "free-choice" medical service, or group
hospitalization and clinical care
- Qualified long-term care insurance contracts.
You cannot include premiums you pay for:
Life insurance policies
- Policies providing payment for loss of earnings
- Policies for loss of life, limb, sight, etc.
Policies that pay you a guaranteed amount each week for a stated number of weeks
if you are hospitalized for sickness or injury
- The part of your car insurance premiums that provides medical
insurance coverage for all persons injured in or by your car,
because the part of the premium for you, your spouse and your
dependents is not stated separately from the part of the premium
for medical care for others.
Since this is pretty basic stuff, I'm going to assume
that there are maybe some facts that you did not describe to me
but that your adviser is aware of. Your deduction may or may not
be allowed depending on how you pay for your health insurance. If
you're an employee and your health insurance premiums are paid under
a cafeteria-plan arrangement, then these are pretax dollars and
would not count as a medical expense in reaching the 7.5 percent
of AGI. In other words, since the medical premiums paid under a
cafeteria plan are not considered wages to you (they are not included
in your Form W-2), you can't double dip by claiming a deduction.
Alternatively, if you're self-employed or a shareholder
in an S corporation, or partner in a partnership, the medical insurance
premiums should be claimed as an adjustment to gross income on Line
29 of Form 1040. This treatment is more beneficial than claiming
the medical insurance premiums as an itemized medical expense deduction.
If the exceptions above do not apply, then I suggest
that you ask your adviser to get a second opinion from someone else
in the office. If you're still not satisfied, re-evaluate your relationship
with the preparer.