Friday, March 4, 2011

Does individual health insurance qualify for tax deduction?

I am employed, however i am paying my own personal health insurance instead of opting for the group insurance which my employer has since it worked out to be cheaper than group insurance. Now when i am filing my taxes can i claim medical insurance premium as tax deductible.
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Healthcare Insurance Premiums are deductible as part of Medical and Dental expenses. Only the amount of all of your medical and dental expenses that exceeds 7.5% of your Adjusted Gross Income can be deducted. A better bet is to see if your employer offers a Section 125 Premium Conversion Plan (more commonly known as a "Cafeteria Plan", which would allow your employer to deduct the cost of the premiums pre-tax and send it directly to your insurance company. If your employer was willing to do this, then ALL of the money you spend on health insurance would be tax-free (not just income tax, but free of all OASDI, Medicare, and State taxes as well).
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