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tax deduction for retiree health ins premiums
Old 03-03-2012, 04:56 PM   #1
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tax deduction for retiree health ins premiums

Does anyone know of an instance where Health Insurance Premuims we now pay as a retiree for health insurance through fomer employer 's plan would be able to be tax deductible. just seems that it should be as it was paid with pretax money while an active employee.
this seems to unfairly burden early retired people who can't go to medicare, but remain on company plan as early retirees. (not to mention it's also more expensive than employee 's premium)
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Old 03-03-2012, 05:12 PM   #2
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I believe Health insurance premiums and Cobra premiums are qualified medical expenses for HSA purposes.

If you don't have an HSA, your insurance premiums are considered medical expenses. Medical expenses are deductible to the extent they exceed 7.5% of your AGI.
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Old 03-03-2012, 05:29 PM   #3
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Yes, health insurance premiums are deductible medical expenses, even in early retirement.

Steven and katste12, welcome to the forum. Why not stop by and introduce yourselves here Hi, I am... - Early Retirement & Financial Independence Community
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Old 03-03-2012, 08:08 PM   #4
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Unfortunately, as mentioned previously, you can only deduct the insurance premiums, to the extent that medical expenses (including the premiums) exceed the min. floor amount of 7.5% of AGI and even if they do exceed that floor are only useful if you itemize so employees who make pre-tax payments do have an advantage.
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Old 03-03-2012, 08:18 PM   #5
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We never have enough deductions to itemize for Federal, but this was the first time we had enough for a medical deduction for our state taxes and our un-subsidized dental insurance premiums counted toward that. Our medical is subsidized through the retiree plan but for the dental we pay the full amount.

So check if it will help you for your state taxes.
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Old 03-03-2012, 10:44 PM   #6
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Unfortunately kaneohe is correct.

As an employee the premiums are paid with before tax money regardless of your income or deductions. It was a nice tax subsidy I also lost as an ER. My company also had an FSA scheme for employees where we put before tax money to pay out of pocket expenses including OTC drugs, eye tests, dental, glasses etc.

Rather than thinking of it as unfair, you should consider it as a worker's tax-free perk you no longer have.
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Old 03-04-2012, 10:03 AM   #7
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I guess that a good way to look at it.
We miss out taking it on sched a - never reach the 7.5% to be able to itemize
thanks for the help
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Old 03-04-2012, 10:04 AM   #8
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Quote:
Originally Posted by Alan View Post
Rather than thinking of it as unfair, you should consider it as a worker's tax-free perk you no longer have.
+1
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Old 03-04-2012, 10:22 AM   #9
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Quote:
Originally Posted by Steven View Post
I believe Health insurance premiums and Cobra premiums are qualified medical expenses for HSA purposes.
.
True for Cobra but not medical insurance premiums in general according to this see p. 8-9 http://www.irs.gov/pub/irs-pdf/p969.pdf
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Old 03-06-2012, 05:28 PM   #10
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Quote:
Originally Posted by kaneohe View Post
Unfortunately, as mentioned previously, you can only deduct the insurance premiums, to the extent that medical expenses (including the premiums) exceed the min. floor amount of 7.5% of AGI and even if they do exceed that floor are only useful if you itemize so employees who make pre-tax payments do have an advantage.
Ah, yes, another deduction to make the cost of my new mortgage even cheaper. OH OH, sorry I must be on the wrong thread.
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