For self-employed US citizens having a net profit for any
particular year the premiums paid for health insurance policies covering
medical expenses and long-term care services are also deductible. Apart from
the payments made to doctors and other health care professionals, in-patient
hospital and nursing home care, acupuncture treatments, cure for alcohol and
drug addiction and payment made to weight loss programs and certain diseases
may also be deducted. But burial expenses, medicine bought over the counter,
health improvement tours and cosmetic surgeries are not deductible.
How to Claim?
In order to claim deductions on your dental and medical
expenses under IRS publication 502 your tax return must be filed on Form 1040.
Along with the deductions itemized, all other expenses sans premiums paid for
health insurance by self-employed citizens a Schedule ‘A’ attachment is to be
used. For self employed tax-payers Form 1040 is to be directly used for
deduction of their insurance premiums. Any other cost incurred in addition to
this must also be mentioned in the Schedule ‘A’ attachment.
Apart from that. To make medical expenses and insurance
premiums deductible they must also be paid with after tax money. This implies
that medical expenses paid through Health Savings Accounts or expenses that are
withheld from the paycheck and are paid through pre-tax money are not covered
for tax deduction under IRS publication 502. This particular publication is
normally used by tax-payers for determining deductible medical expenses without
any regard to the time when the service was actually provided. You can also use
the Section 125 health plans along with IRS publication 502 to determine the
expenses covered by this publication.
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