Are Premiums for Health Insurance Paid With Pretax Deductible Dollars?

You may be able to deduct at least part of your health insurance premium on your taxes. If you receive insurance through work, you can only claim the part of the premium you pay yourself, not the part paid by your employer. In order to write off the premiums, you have to itemize deductions, unless you're self-employed.

Deductible Premiums

• Not all insurance coverage is deductible, according to the Internal Revenue Service. You can write off the part of your premium that pays for drugs, hospitalization, surgery, doctor's visits and dental care, but not coverage for items the IRS does not consider deductible, such as nonprescription drugs. If your coverage only applies to acceptable medical expenses, there's no problem. Otherwise, you may have to ask your insurer to break down which part of the premium pays for what.

Long-Term Care

• If you have a long-term care insurance policy, you can deduct premiums up to the amount allowed by the IRS. For 2010 taxes, for example, the amounts ranged from $330 for the year if you were under 40 to $4,110 if you were 70 or over. If the policy covers you and other family members, that limit is per individual, not for your total payments. The IRS imposes other restrictions, for example that the policy is guaranteed renewable.

Deduction

• Before deciding to itemize deductions, calculate your adjusted gross income (AGI) on the front of your Form 1040, then multiply that figure by 7.5 percent. Add up your family's deductible medical bills -- premiums, drugs, hospital bills, annual checkups and anything else the IRS allows -- and subtract 7.5 percent of your AGI from the total. If your AGI is $100,000, 7.5 percent is $7,500. If you have $11,000 in medical bills, your deductible expenses would be $3,500, since $11,000 - $7,500 = $3,500.

Self-Employment

• If you're self-employed and pay for your own medical insurance, you may be able to deduct 100 percent of the premiums for yourself, as well as your spouse, dependents and possibly adult nondependent children, too, if you buy their coverage. The policy must be in either your name or your business' name, and you must show a net profit or, for a partnership, net earnings. You record the premium deduction on your 1040, rather than on Schedule C, the form for business profit and loss.