Dental insurance premiums may be tax deductible. The Internal Revenue Service (IRS) states that to be deductible as a qualifying medical expense, dental insurance must be for procedures to prevent or alleviate dental disease, including dental hygiene and preventive examinations and treatments. . Dental insurance for purely cosmetic purposes, such as teeth whitening or cosmetic implants, would not be deductible.
Key points to remember
- Dental insurance premiums may be tax deductible under certain conditions.
- Insurance must be for procedures that prevent or mitigate dental disease.
- Insurance premiums covering cosmetic procedures, such as teeth whitening and veneers, are not tax deductible.
What does dental insurance generally cover?
That’s usually not a problem, however, because dental insurance rarely covers cosmetic work. Instead, it only covers procedures strictly related to health and wellness. It has a three-tier structure, known as 100-80-50, and a typical yearly maximum amounting to a median of $1,500.Inasmuch asInasmuch as
Preventive care, such as annual cleanings, X-rays and sealants, are covered at 100%. Basic procedures, such as fillings, extractions and periodontal treatment for gum disease, are covered at 80%. Major procedures (crowns, bridges, inlays and dentures) are covered at 50%. Depending on your plan, root canals can fall into the basic or major category. Most plans focus on preventative and basic care, and not all procedures are covered.Inasmuch asInasmuch as
What is Cosmetic Dentistry?
Cosmetic dentistry includes procedures that exist for the primary purpose of improving the appearance of the patient’s teeth and smile. Bleaching treatments, veneers, bondings and smoothing procedures, such as Invisalign, are included in this group. These procedures, although widely known and very popular, tend not to be covered by insurance and require the patient to pay the full cost. And, unfortunately, these costs would not be tax deductible.
Where are the tax deductible dental insurance premiums?
For most taxpayers, the cost of medical and dental insurance premiums paid during the tax year are deductible on Form 1040 Schedule A as medical and dental expenses.Inasmuch asOnly the total of all eligible medical and dental expenses, including insurance premiums, which, when combined, exceed 10% of the taxpayer’s adjusted gross income (AGI) in 2020 (compared to 7.5% in 2019 ), will in fact be included in the total of any itemized deductions.Inasmuch asInasmuch as
For example, if a couple has an AGI of $100,000 and a total of $7,000 of eligible medical and dental expenses, including paid dental insurance premiums, none of those expenses will be included as an itemized deduction. 10% percent of the AGI would be $10,000, which is more than the couple’s total medical and dental expenses.
Self-employed persons may deduct dental insurance premiums under certain conditions as an income adjustment on Schedule 1, rather than as an itemized deduction on Schedule A.
If you are self-employed
If you are self-employed, you can deduct the cost of dental insurance for yourself, your spouse and dependents as an income adjustment, but only if “you were self-employed and made a profit net for the year reported on Schedule C (Form 1040 or 1040-SR) or Schedule F (Form 1040 or 1040-SR). In addition, the insurance plan must be established under your company and “can be either in the name of the company or in the name of the individual”.Inasmuch asInasmuch as
You deduct the cost of dental insurance on Schedule 1, line 16, as an adjustment to income, without having to itemize the deductions on Form 1040 Schedule A with the 10% AGI limit described above -above.Inasmuch asInasmuch as
Dental insurance premiums paid with funds from a Flexible Spending Account (FSA) or Health Savings Account (HSA) are not deductible, as these funds are pre-tax and the IRS does not does not allow a double tax advantage.Inasmuch asInasmuch as