With the price of health insurance skyrocketing, you may wonder if you can deduct the cost of the premiums from your federal taxes. While you can deduct health insurance premiums in most cases, the answer depends whether or not you itemize deductions on your federal tax return and whether you or your employer paid for the premiums.
College Health Insurance
The majority of college students are on their parents' employer-sponsored group plan. However, if you want to deduct your health insurance premiums, you must have paid for the premium yourself. If you are on your parents' health insurance plan, you can't deduct the premium -- but your parents can. Your college may have a college health insurance plan to pay for basic clinic needs or you may have an individual health insurance plan. Both of these types of premiums are deductible.
Itemizing Deductions
To claim and medical or dental expenses on your tax return, you must itemize deductions on Form 1040, Schedule A. You can only claim health insurance premiums that you paid in college if your health insurance premiums exceeded 7.5 percent of your adjusted gross income. If you are a college student, you'll probably be earning a low income and will qualify for the deduction. The only way to know for sure is to calculate your adjusted gross income and see if your premiums exceed the 7.5 percent threshold.
Allowable Deductions
The Internal Revenue Services defines the types of health insurance premiums that you can deduct on your policy. If you have a major medical policy, a policy that covers long-term care or both, you can deduct the premiums. You can also deduct premiums paid for dental insurance and vision insurance. The premiums are deductible whether you are self-employed, work for someone else or are a college student.
Other Health Deductions
Don't overlook the other medical expenses you can deduct: fees that you paid to any health care professional are deductible. For example, if you needed to get a sports physical that wasn't covered by your insurance, you can deduct the cost of that. As a college student, you may have had to get booster immunization shots: they are covered too. If you paid copays or out of pocket for prescription drugs, acupuncture treatments or prescription glasses, they are allowable deductions.
References
- IRS: Medical and Dental Expenses
- USA Today: A Lesson in Health Insurance for College Students
- CBIZ: IRS Releases Official 2010 Tax Rate Brackets
- Internal Revenue Service. "Publication 535: Business Expenses," Pages 21 & 22. Accessed Dec. 3, 2019.
- Internal Revenue Service. "Publication 535: Business Expenses," Page 24. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Page 17. Accessed Dec. 3, 2019.
- Internal Revenue Service. "Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans." Accessed Dec. 4, 2019.
- Internal Revenue Service. "Publication 5307: Tax Reform Basics for Individuals and Families," Page 8. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Publication 502: Medical and Dental Expenses," Page 17. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Page 27. Accessed Dec. 3, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Page 19. Accessed Dec. 3, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Pages 20 & 21. Accessed Dec. 3, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Page 6. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Nonqualified Deferred Compensation Audit Techniques Guide." Accessed Dec. 4, 2019.
- Internal Revenue Service. "Treasury and IRS Shut Down Abusive Life Insurance Policies in Retirement Plans." Accessed Dec. 11, 2019.
- Internal Revenue Service. "Retirement Topics: Defined Benefit Plan Limits." Accessed Dec. 4, 2019.
- Internal Revenue Service. "Publication 560: Retirement Plans for Small Business," Page 15. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Revenue Ruling 2004-20," Page 5. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Employee Benefit Plans," Page 6. Accessed Dec. 11, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Page 10. Accessed Dec. 4, 2019.
- Internal Revenue Service. "Publication 525: Taxable and Nontaxable Income," Page 21. Accessed Dec. 11, 2019.
Writer Bio
Stephanie Ellen teaches mathematics and statistics at the university and college level. She coauthored a statistics textbook published by Houghton-Mifflin. She has been writing professionally since 2008. Ellen holds a Bachelor of Science in health science from State University New York, a master's degree in math education from Jacksonville University and a Master of Arts in creative writing from National University.