Me and my husband are employed by the same company.Company doesn't pay for our health insurance. Can we deduct our health insurance on taxes? Thanks!

[aleksandra-sveti]

Me and my husband are employed by the same company. Company doesn't pay for our health insurance. Our employer takes away our federal and state taxes and the rest we get on our bank account. We have private health insurance through Blue Cross and are paying for it with after tax money. Can we deduct our health insurance on taxes? Thanks!

[DawnC0 · Accepted solution]

Yes, you can claim your health insurance premiums as well as any other medical expenses you have on Schedule A, under Medical expenses.  You're only allowed to deduct medical expenses that go above and beyond 7.5% of your AGI and they are itemized deductions meaning you will have to have a lot of expenses in order to see a benefit on your federal tax return.  However, you should enter all of your medical expenses anyway, including your health insurance premiums, because you may get credits and deductions on your state return that you do not get on your federal return.  

[aleksandra-sveti]

Thanks for quick answer! I would like to get to the bottom of this...if I pay health insurance with after tax money shouldn’t I be able to deduct that directly? Or is it better that my employer pays for my insurance with pre-tax money even though he doesn’t offer health insurance through work? Thank you!

[aleksandra-sveti]

Thanks for quick answer! I would like to get to the bottom of this...if I pay health insurance with after tax money shouldn’t I be able to deduct that directly? Or is it better that my employer pays for my insurance with pre-tax money even though he doesn’t offer health insurance through work? Thank you!

[DawnC0]

Unfortunately, that is an issue with paying for premiums with post-tax money as you and your husband do.  Unless you itemize, you can't get the federal tax break (your state may be different).  However, if your employer pays with pre-tax dollars, you get the tax break immediately whether you itemize or not.  Since medical expenses are an itemized deduction, you lose the benefit if the total of your itemized deductions is less than the standard deduction.  If you are not going to itemize, then the only way to get the tax break on those premiums is to have your employer pay them with pre-tax wages.     

[Anonymous]

being employees (getting W-2's) and paying for it means you can not deduct them as self-employed health insurance.  thus you can only include the premiums in medical expenses on schedule A.   medical expenses are  reduced by 7.5% of adjusted gross income to arrive at the deductible portion.