As Portuguese families close their accounts and file IRS returns showing their income and expenses for the past year, the question arises: Are health insurance expenses deductible with the IRS? If in doubt, you should consult an accountant or institutions with training in the field.
The answer is yes. The health insurance premium paid by the insured person is considered, for tax purposes, a health expense and therefore deductible by the IRS.
IRS law stipulates that 15% of the value of the health insurance premium is tax deductible, up to a maximum of €1,000 per family. In the case of married couples who choose to file the IRS return separately, the deduction can be up to €500 for each member of the spouses.
It is important to note that this portion only includes insurance premiums that exclusively cover health risks, meaning that any additional coverage costs will not be taken into account.
These expenses fall within the scope of health expenses and allow families who support insurance to reduce the amount of tax owed to the IRS or increase the amount to be collected.
In addition to the premium, expenses for examinations and treatments performed within the scope of health insurance can be deducted, but only for the part that is not reimbursed by the insurance company. That is, approximately the amount you actually paid for these services.
Taxpayers can also take an IRS deduction for other health expenses not covered by insurance. Bills for medical expenses that are exempt from VAT are counted under this deduction category.
Health insurance does not appear in the electronic bill?
no. Although it is deductible with the IRS, you will not find the amount related to the health insurance premium on the electronic bill.
At the beginning of each year, insurers submit returns relating to amounts paid by taxpayers to HMRC. These expenditures will only become available for consultation on the funding portal after this process is complete.
Where can I place insurance with the IRS?
If everything is correct, the installment amount will already appear in the pre-filled declaration, which you will only have to confirm and submit. Otherwise, you will need to manually enter your health insurance expenses in Appendix H.
Can health insurance paid by the company be deducted?
In the case of health insurance provided by the employer to its workers, there are several situations that must be taken into consideration. The first is to find out whether health insurance is considered income for the employee or not.
IRS law states that health insurance is not considered employment income if it is a public benefit, that is, if it is given to all workers. In this case, the prize is not subject to tax and is therefore also not tax deductible. However, the worker can continue to deduct the portion of expenses not reimbursed by the insurance company.
Conversely, if health insurance is available only to some workers, it is considered overtime pay. Therefore, the value of insurance premiums is taxed as business income, which means it can also be deducted by the IRS.
