Can You Write Off Health Insurance in 2025?
Can You Write Off Health Insurance in 2025?
In 2025, many individuals wonder whether health insurance premiums or related expenses qualify for tax deductions. With rising healthcare costs, understanding your eligibility can lead to meaningful savings. This guide explains the current rules, eligible costs, and steps to claim health insurance expenses on your tax return—right under IRS guidelines.
Understanding Tax Deductions for Health Insurance
The ability to write off health insurance hinges on your circumstances. Generally, employer-sponsored premiums don’t qualify for itemized deductions anymore since the Tax Cuts and Jobs Act suspended most personal medical deductions post-2018. However, certain specific expenses remain deductible under updated 2025 IRS provisions. These include out-of-pocket costs not covered by employer plans, as well as qualifying long-term care insurance premiums.
Eligible Expenses You Can Deduct This Year
While direct premiums aren’t deductible, several related costs may reduce your taxable income:
- Out-of-pocket medical expenses exceeding 7.5% of your adjusted gross income (AGI), including deductibles, coinsurance, and unpaid bills.
- Deductible health savings account (DSA) contributions, which grow tax-free and reduce taxable income.
- Long-term care insurance paid after age 55, covering nurse care, assisted living, or home health services.
These deductions apply only if you itemize deductions or take the standard deduction and itemize. The IRS allows deductions for expenses that are both qualified medical and not covered by a primary insurance plan.
Key IRS Requirements and Limits in 2025
To claim any health-related deduction, three core criteria apply:
- Primary insurance coverage: You must have a qualifying plan through work, school, or COBRA. Self-employed individuals must carry at least a minimum essential coverage plan.
- Itemized deductions: The total of itemized deductions (including health expenses) must exceed the standard deduction amount for your filing status and AGI.
- Medical necessity: Costs must be for legitimate healthcare, not elective or cosmetic procedures unrelated to health.
Recent IRS updates emphasize documentation—keep receipts, invoices, and proof of payment. For health savings accounts, contributions are tax-deductible and grow tax-free within qualified accounts.
Step-by-Step Guide to Claiming Deductions
To claim eligible health insurance or medical costs:
- Gather all relevant receipts and bank statements from 2024 or 2025.
- Calculate your total eligible expenses, ensuring they exceed 7.5% of AGI.
- Complete Schedule A (Itemized Deductions) if itemizing.
- Report qualifying long-term care premiums under Form 56 (if applicable).
- Submit your return with supporting documentation to avoid IRS scrutiny.
Final Thoughts and Call to Action
While direct health insurance premium deductions are limited, strategic claims—like out-of-pocket costs, DSA contributions, and long-term care insurance—can lower your tax burden significantly in 2025. Staying informed and organized ensures you don’t miss out on legitimate savings. Start reviewing your 2024 tax records today, consult a tax professional if needed, and maximize your eligible deductions. Don’t wait—secure your tax benefits before the filing deadline.