Health Insurance Premiums -- Tax Deductible?

Factual Questions
1

On the Great Debates page there are a few threads dealing with health insurance. One of the issues brought up concerns whether or not a person who is not self-employed can deduct the cost of health insurance premiums from his/her taxes. Weirddave contends these premiums are deductible while I expressed my belief that these premiums were not deductible. Weirddave, who knows a lot about health insurance, and I even talked on the phone about this and we called an expert he knows who assured us that these premiums were, indeed deductible for individuals. End of story, right?

Not quite. I tried to find info on the IRS page and only came up with a cite that health insurance premiums are deductible if they contribute to medical expenses that equal at least 7.5% of income. I couldn’t find anything else. And then I go to the Council for Affordable Health Insurance webpage and read this:

So, as you can see, there is conflicting information about this. It’s driving me nuts, since this question affects some work that I’m doing.

Does anyone have the straight dope on whether or not health insurance premiums are tax deductible for those who are not self-employed?

2

I believe they are deductible when your total yearly “out of pocket” medical expenses exceed 7.5% of your yearly income.

My wife and I did this. Together we made about $100K in a year. We also spent money on in-vitro treatements that ran about $14,000 that insurance did not cover. We also added any other out of pocket medical treatments we had. the $600 for my crowns that insurance only covered 20% of.
Because we spent over $7,500 is was deductible.

The next year we added it up and we had spent about $4,000 out of pocket. Not enough to be tax deductible.

3

If it helps, here is the IRS publication that goes over deduction of medical costs, including insurance premiums. http://www.irs.gov/pub/irs-pdf/p502.pdf

4

In short, if you are able to itemize deductions (Schedule A), you can deduct medical insurance premiums to the extent that they, along with your other out-of-pocket medical expenses are over 7.5% of your taxable (or is it gross?) income.

If you file short form, unless something has changed this year, you cannot deduct any medical expenses or premiums.

5

Also keep in mind that if your employer provides health insurance to which you contribute part of the premium, you may have a pre-tax plan. In that case the premium has already reduced the taxable part of your wages. In effect, you have already deducted it … and you can’t deduct it again.