Qualifying Medical Insurance Premiums

• If you pay for qualifying medical insurance premiums, you can claim an income tax deduction for the amount by which they exceed 7.5 percent of your adjusted gross income. Medical premiums include medical insurance, dental insurance and qualified long-term care insurance. These premiums can be for yourself, your spouse or your dependents. You can also claim medical premiums you pay for someone who would have been your dependent but you could not claim as a dependent because of the following stipulations: He earned more than $3,650, filed a joint return, or you or your spouse could be claimed as a dependent on someone else's return. For example, if you were going to claim your baby as a dependent, but could not because your spouse was able to be claimed as a dependent on her parent's income tax return, you could still claim the medical premiums that you paid on the baby's behalf. Life insurance premiums are not included in the medical premiums deduction.
  
  

Reporting the Deduction

• To report your deduction, attach Schedule A to your Form 1040 tax return. Schedule A is your list of itemized deductions. On line 1, report your medical premiums. On line 2, copy your adjusted gross income from line 38 of Form 1040. Multiply your adjusted gross income by 0.075 and report the result on line 3. Subtract this amount from your medical premiums to find the value of your deduction and report it on line 4. This amount, added together with your other itemized deductions, is copied to line 40 of Form 1040 and subtracted from your taxable income.
  
  

Other Includable Expenses

• Since you can only deduct the medical and dental costs in excess of 7.5 percent of your adjusted gross income, you want to maximize the value of your deduction. In addition to the medical premiums, you can also include qualifying medical expenses, which the IRS defines as the cost to diagnose, treat and prevent diseases. These include the cost of prescription drugs, copayments required by your insurance and surgeries.
  
  

Medical Premiums for the Self-Employed

• If you are self-employed and do not have the option of participating in an employer-sponsored plan, you can claim a deduction of the medical premiums you pay as an adjustment to income without having the 7.5 percent of your adjusted gross income barrier. To do so, report the amount of your medical insurance premiums on line 29 of Form 1040. This amount reduces your income subject to taxes for the year. You cannot also claim these premiums as part of your medical expenses deduction.