Although there are many cheap health insurance plans out there, you may still want to find ways to offset the cost of paying those monthly premiums. The good news is, if you’re self-employed, you may be able to claim those health costs on your taxes and reduce the amount you pay in next year. Health care costs might also be tax deductible for those who aren’t self-employed as well.
Tax Deductible Premiums
If you’re self-employed, you’re probably paying out-of-pocket to provide health care coverage for yourself and any dependents or family members. When you work for yourself, these costs are considered tax deductible, and the amount you’re paying is reduced from your income. Even if you don’t take the time to itemize your deductions, you can still deduct health insurance premiums. You cannot deduct them if you or other family members are also covered under another policy, such as a spouse’s healthcare plan offered by their employer.
Benefits of Health Savings Accounts
If you work for a company who offers a health savings account option, or HSA, the money paid in can be tax deductible. Although there are dollar limitations, the money paid in by the individual can often be deducted, and this amount will change depending on whether you’re filing as an individual or as a family. Families who are on a tight budget will especially benefit from this option, as HSA contributions are taken out before taxes, making this a power-packed way to save on taxes.
Additional Health Deductions
Even if you’re not paying the cost of your own health insurance policy or contributing to an employer-offered HSA, there are still healthcare deductibles you can claim on your taxes. Out-of-pocket expenses related to health and dental care can often be written off on taxes, including office co-pays and costs for your prescriptions. Even some over-the-counter purchases like contact lens solution or vitamins recommended by your physician may be eligible for deductions. Sometimes even optional procedures like LASIK eye surgery or breast reduction can be claimed and deducted. Check with your local tax accountant or the IRS website to discover the guidelines for taking these types of medical deductions, all of which can help mitigate any costs associated with maintaining a group health insurance plan.