Feeling stupid...health care premium deductibility

[WestwardBound]

After 3 years of retirement (and 37 years of W2s before that), I figured out that I may be able to deduct health insurance premiums. Check me on this please.

I am fully retired but I am still on my old employers insurance plan as a retiree. I pay 100% of my premiums out of pocket. I can deduct that as a medical expense on Schedule A, correct? Then I can deduct other smaller medical expenses such as co-pays, prescription co-pays, etc.

The amount in excess of 7.5% of my AGI is deductible on Schedule A, correct?

If correct, my deductions for 2022 may actually be enough to itemize rather than take the standard deduction.

 

[Freedom56]

The amount in excess of 7.5% of your AGI for all medical expenses (insurance, copays, lab fees, drugs, etc...) including mileage to visit your doctor is deductible in the calculation of your itemized deductions.

 

[ERD50]

Yes, deductible within those limits. You just have to run the numbers. If enough of a delta, you could file an amended return for previous years. But that standard deduction is a hurdle, aren't there also the SALT (State an Local Tax) limits?

-ERD50

 

[WestwardBound]

Yes, deductible within those limits. You just have to run the numbers. If enough of a delta, you could file an amended return for previous years. But that standard deduction is a hurdle, aren't there also the SALT (State an Local Tax) limits?

-ERD50

Thanks for replies.

I'm rerunning for this year as I have a lower than normal AGI and the 7.5% hurdle is not enough to negate itemizing as better than standard. But won't affect prior years.

 

[EastWest Gal]

I believe you are correct. There is a worksheet for medical and dental expenses. Also don’t forget to include long term care insurance premiums if you have LTC insurance, glasses, hearing aids, etc.

https://www.irs.gov/taxtopics/tc502

 

[cathy63]

After 3 years of retirement (and 37 years of W2s before that), I figured out that I may be able to deduct health insurance premiums. Check me on this please...

If you find that it's beneficial to itemize, you can amend your Federal returns for 2019, 2020 and 2021 to take advantage of the deduction. For the 37 years before you retired, you most likely weren't allowed to deduct your premiums because employer provided insurance is almost always paid with pre-tax dollars.

For medical expenses, don't forget to include dentist, eye doctor, glasses and mileage. A lot of people just think about their physicians and forget that dentists are doctors too, but those expenses can really add up.

If you have state taxes, you should also take a look at whether you can itemize for those even if you don't for Federal. In CA, we do a lot of returns where we itemize for state only because our standard deduction is very low.

 

[RetiredHappy]

Since we pay full freight for my health insurance, i.e. private off-exchange individual plan, plus getting mortgage interest of $6K per year when we bought our current home 2 years ago, we have been able to take itemized deductions for the past 2 years. Our AGI is pretty hight but we are still able to take itemized deductions, which came in as $37K for 2022.