[deecee2000]

Hi,
I have one question regarding Health insurance Premium. I am on H1B visa holder and working in US. My company has some medical insurance plans but the premium is little higher. Hence, I decided to go with individual insurance from outside. I understand that if our medical expenses are more than 7.5% then only we can exempt this amount to Tax return. My question is does health insurance premium also count in this amount or only medical expenses?
For example if my annual gross salary is 50K and Medical Premium is 3K for whole year and Medical expenses also 3K for whole year. So if I combine these both thing, it is 6K and it is more then 7.5%. But if I only include medical expenses then 7.5% is 3750 which is more than my medical expenses.

Thanks,

[AtlantaTaxExpert]

If you pay your medical insurance premium THROUGH your employer, it is all but assured that the premium will be paid with PRE-tax money and thus will NOT be deductible on your tax return.

If, however, you pay your OWN medical insurance preimum independent from your place of employment, then the medical insurance premium CAN be included as part of your medical expenses.

However, you will find that the 7.5% of AGI that is the FLOOR for deductibility of medical costs was carefully selected. Even with medicval insurance premiums, it is REAL HARD to spend more than 7.5% of your annual income on medical costs UNLESS you have a catastrophic medical cost for which you have no insurance. That was the tradeoff in 1986 when Congress lowered the income tax rates.