Requirements

• To deduct the cost of your health insurance, you must itemize your return. If you have total qualifying medical expenses, including health insurance premiums, that exceed 7.5 percent of your adjusted gross income, you can deduct the excess. Qualifying medical expenses include payments to doctors, hospitals and addiction treatment centers, payments for prescription medications, expenses related to the purchase of aids such as glasses, dentures and wheelchairs and medical transportation expenses.
  
  

Exclusions

• You can't deduct the cost of funeral or burial expenses, over-the-counter medications, cosmetic treatments, health supplements or treatments for general health improvement. You can't deduct expenses that your insurance company reimbursed, whether the insurance company sends the reimbursement to the provider or to you. If your employer subsidizes your health insurance premiums, you can only deduct the taxable portion of the premium that you paid. If your employer withholds your portion of the premium from your paycheck before taxes are assessed, the premium is non-deductible.
  
  

Self-Employment

• If you are self-employed, you may be able to deduct 100 percent of the cost of your health insurance premiums. However, you can't take this deduction if you have access to health insurance coverage from another source, such as through your husband's employer-sponsored health plan. To deduct your premiums as a self-employed taxpayer, you don't have to exceed any percentage of your adjusted gross income, nor do you need to itemize your tax return.
  
  

Considerations

• You don't have to itemize your return to deduct the cost of health insurance if you are self-employed. However, if you have other medical costs that exceed 7.5 percent of your adjusted gross income and you itemize your return, you can still take the medical expense deduction for your other expenses. If you are self-employed, you can also deduct the cost of your health insurance when you calculate your Social Security taxes.