How to Claim Health Insurance on Taxes

Though many people consider health care coverage an essential expense, paying the insurance premiums each month can be a significant drain on a household's finances. Health insurance policies may cover individuals or entire families, and the premiums are usually only a portion of total medical expenses for the year. Fortunately, the Internal Revenue Service lets taxpayers deduct out-of-pocket health insurance premiums on their tax returns.


Step 1

Don't pay for your health insurance through your employer with pretax dollars. Otherwise, your gross wages pay for your health insurance premiums before you pay any taxes. Because the IRS hasn't taxed you for that money, you can't claim the payments as a tax exemption a second time.

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Step 2

Use IRS Form 1040 to calculate your adjusted gross income for the year. This is the total amount you enter on line 38 of the form, after you have claimed the standard deductions for the tax year.


Step 3

Multiply your adjusted gross income total by 7.5 percent. As of 2010, this is the amount that your medical expenses must exceed for you to claim them as itemized deductions on your tax return. Enter this total on line 40 of Form 1040. It's labeled "Itemized deductions."

Step 4

Subtract this amount from the total amount you paid in health insurance premiums and other medical expenses for the year. The subsequent total is the amount you can itemize as a health and medical expenses deduction on your 1040 return, using Schedule A.


If you are self-employed or your main income comes from shares in an S corporation, you don't have to itemize or calculate percentages. You can deduct 100 percent of your private health insurance premiums from your adjusted gross income on line 29 of Form 1040, which is labeled "Self-employed health insurance deduction."


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