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Dental premium tax deduction

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Can I Deduct My Dental Premium From My Taxes?

Most people who have Medicare insurance know that it's tax deductible in most cases. Unfortunately, the same is not true for your private health and dental insurance. You can't write off health and dental insurance from your taxable income, even if you are a self-employed individual or freelancer – except in a few cases. The average cost of dental insurance is $47 per month, according to a Forbes article, with annual costs ranging from $600 to $2,000. Health insurance, on the other hand, can cost much more, depending on the plan. Understanding the ins and outs of health and dental insurance can help you lower your tax bill. You may be able to deduct your health and dental insurance costs as above the line deductions, rather than itemizing them like business expenses. Key highlights:
  • Find out how dental insurance figures into your medical expenses
  • Understand how Medicare premiums work
  • Learn whether dental insurance is tax deductible

Table of contents

What’s the self-employed health insurance deduction limitation?...Read more

Are Medicare premiums tax deductible?...Read more

What's the difference between Medicare, health insurance and dental insurance?...Read more

Are dental insurance premiums tax deductible?...Read more

What are the limitations of dental insurance?...Read more

What’s the self-employed health insurance deduction limitation?

As a general rule, you can’t deduct your health and dental insurance if they are less than 7.5% of your total income. But if your income is just barely edging into a higher tax bracket, an above the line deduction can act as a savior. An above the line deduction helps you lower your annual gross income and arrive at your adjusted gross income (AGI), and you can take health and dental insurance as above the line deductions if you satisfy some conditions. For example, if you are working toward a degree at a university and also working as a self-employed social media executive, you might have a shot at using your health and dental insurance to lower your income. Let’s say your self-employed income is around $97,000 a year, and your health and dental insurance costs $7,200. Since you are also a student you can qualify for an education tax credit and can also deduct the cost of your insurance from your AGI. This would bring your income down to $89,800, and you would avoid the higher tax bracket that has a 24% tax rate. The insurance can be a combination of:
  • Health insurance
  • Dental insurance
  • Vision insurance
Adding these other forms of insurance can push your health and dental insurance bill higher, but you can also deduct the expense if it exceeds the threshold.

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Are Medicare premiums tax deductible?

No, you can’t deduct Medicare premiums directly. Here are a few things to keep in mind:
  • Premium-free Part A: Medicare premiums are $0 for most qualified taxpayers. You pay nothing for a monthly premium if you have paid Medicare taxes on your income for 10 years or more. To qualify for Premium-free Part A, you need to be on disability or be receiving retirement benefits.
  • Part A cost: Those who don't qualify for Medicare can buy it for a monthly premium of $274 or $499 in 2022. To do this, you must also sign up for Part B.
  • Medicare as a tax deduction: If you paid for Medicare premiums, you can deduct up to $1,556 for every hospital visit.
If you're self-employed, your Medicare taxes are part of SECA taxes, which are mandatory for every self-employed individual, freelancers and independent contractors. W-2 workers pay Medicare taxes as part of FICA taxes. Here’s a breakdown of the cost for self-employed people:
Are Medicare premiums tax deductible?

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What's the difference between Medicare, health insurance and dental insurance?

Every US citizen or person over 65 years of age or with a disability has the right to receive Medicare and Social Security benefits. Medicare covers medical and hospital expenses, but it does not cover dental care. And Medicare only covers one person, which means only one Social Security number is covered. But dental and health insurance plans let you add multiple dependents or beneficiaries like your children, parents or spouse. Health and dental insurance cover a wide variety of services, including doctors, chiropractors, psychiatrists, dentists and surgeons. You can also get coverage of fees for psychologists and non-traditional medical practitioners. Dental expenses like false teeth can also be covered.

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Are dental insurance premiums tax deductible?

If your health and dental insurance coverage exceed 7.5% of your income then yes, dental insurance premiums are tax-deductible. Form 1040.

Quick tip

If you aim for higher coverage with your health and dental insurance, you will need to avoid the basic insurance plan and go for an advanced option.

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What are the limitations of dental insurance?

Dental insurance usually doesn't cover cosmetic dental work, or work that improves a person's appearance or is done for purely aesthetic purposes. Dental procedures are put into three categories, where you are allowed to claim 100%, 80% or 50% of your total dental expenditure.
What are the limitations of dental insurance?
  • Preventive care includes annual checkups, teeth cleaning and the price of cavity sealants.
  • Basic procedures include tooth extraction, periodic treatments and tooth fillings.
  • Major procedures include dentures, inlays, etc.

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What’s FlyFin?

FlyFin's A.I.-enabled automatic deduction tracker finds all qualifying deductions using your bank statements and can quickly pinpoint dental expenses. It deals with the tax needs of gig workers, freelancers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. to find every possible tax deduction. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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