Can you deduct health insurance premiums for taxes in Michigan? You betcha. You can include in your medical expense deduction, insurance premiums you pay for polices that cover medical care.
Medical care policies provide payment for treatment that includes:
- Hospitalization, surgical services, and X-rays
- Presription drugs and insulin
- Dental care
- Replacement of lost or damaged contact lenses
- Long-term care
If you have a policy that provides payments for things other than medical care, you can deduct the portion of the premiums that cover the medical part of your policy. The medical part must be separately state in the insurance contract or given to you in a separate statement.
Can you deduct these insurance premiums? Nope, Not one dime, Nada:
- You cannot include preimum you pay for
- Life insurance
- Policies that provide payment for loss of earnings (AFLAC comes to mind)
- Policies for loss of life, limb, sight, etc.
- The part of your car insurance that provides medical insurance coverage
- Health or long term care insurance if you elected to pay these premiums with tax-free distributions from a retirement plan
How much can you deduct of insurance premiums?
You can deduct on Form 1040 or Schedule A only the amount of your medical and dental expenses that is more than 7.5% (.075) of your Adujsted Gross Income (AGI) located on Form 1040, line 38.
Example: Your AGI is $40,000, 7.5% of that would be $3,000. Your medical expenses are $2500. Under this scenario you cannot deduct any of your medical expenses because they are not more than 7.5% of your AGI.
If you have more specific questions regarding deducting insurance premiums in Michigan for business. Contact Accountant Tim Grantham of Sallan, Nemes, Lyman & Strakovits at 248-615-9500.
NOTE: This information is directly from the IRS Publication. It is intended for information purposes only. Please consult an accountant for specifics related to your situation.
Originally posted 2010-04-30 03:44:33. Republished by Blog Post Promoter