A prospective new employer doesn't offer health insurance. They give a $500/mth stipend instead. Is this taxable income? Can I deduct my premiums if I can't itemize?

[l-madison82-gmai]

My understanding is that this is taxable income, which will leave me less than $400 to put towards an individual health plan. I have never been able to itemize deductions. Are my health insurance premiums going to be deductible if I can't itemize?

[xmasbaby0]

Medical expenses--including health care insurance premiums that you pay out of pocket-- are an itemized deduction.   If you use standard deduction, then your refund or tax due will not be affected by your health premiums.

MEDICAL EXPENSES

The medical expense deduction has to meet a rather large threshold before it can affect your return. The amount of medical (including dental, vision, etc.)  expenses that will count toward itemization is the amount that is OVER 7.5% of your adjusted gross income. You should only enter the amount that you paid in 2023—do not include any amounts that were covered by insurance or that are still outstanding.  Of course, your medical expenses plus your other itemized deductions still have to exceed your standard deduction before you will see a difference in your tax due or refund.

To enter your medical expenses go to Federal>Deductions and Credits>Medical>Medical Expenses

2023 STANDARD DEDUCTION AMOUNTS

SINGLE $13,850  (65 or older/legally blind + $1850)

MARRIED FILING SEPARATELY $12,850  (65 or older/legally blind + $1500)

MARRIED FILING JOINTLY $27,700  (65+/legally blind) )  + $1500 per spouse

HEAD OF HOUSEHOLD  $20,800 (65 or older/blind)  + $1850)

[DoninGA]

Health care insurance premiums, including dental and vision insurance premiums, and other medical expenses that you paid with out of pocket funds and were not reimbursed are an eligible medical expense that you can deduct using Schedule A for itemized deductions. However, only your total medical expenses that are greater than 7.5% of your Adjusted Gross Income (AGI) can be deducted. Your total itemized deductions reported on Form 1040 Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

Standard deductions for 2023

Single - $13,850 add $1,850 if age 65 or older
Married Filing Separately - $13,850 add $1,500 if age 65 or older
Married Filing Jointly - $27,700 add $1,500 for each spouse age 65 or older
Head of Household - $20,800 add $1,850 if age 65 or older

[rjs]

Yes, the "stipend" is taxable income. It's really just additional wages, no matter what they call it or what they say it's for. It should be included in the wages on your W-2.