Is Dental Insurance Tax Deductible?

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Is Dental Insurance Tax Deductible?

Premiums for dental insurance may be tax deductible. According to the Internal Revenue Service (IRS), dental insurance must be for measures to prevent or relieve dental illness, such as dental hygiene and preventative checkups and treatments, in order to be deducted as a qualified medical cost. Dental insurance for strictly aesthetic reasons, such as teeth whitening or cosmetic implants, is not deductible.

Key Takeaways

  • Dental insurance premiums may be tax deductible in certain circumstances.
  • The insurance must cover treatments that help to prevent or treat dental disease.
  • Insurance premiums for cosmetic treatments such as teeth whitening and veneers are not tax deductible.

What Does Dental Insurance Typically Cover?

However, this is seldom an issue since dental insurance rarely covers aesthetic procedures. It instead only includes operations that are directly relevant to health and wellbeing. It features a three-tier structure known as 100-80-50, with a usual yearly limit of $1,500.

Preventive treatment is completely covered, including yearly cleanings, X-rays, and sealants. Fillings, extractions, and periodontal therapy for gum disease are all covered at 80%. Crowns, bridges, inlays, and dentures are covered at 50%. Root canals may be classified as either basic or major, depending on your treatment plan. The majority of plans concentrate on preventative and basic care, and not all operations are covered.

What Is Considered Cosmetic Dentistry?

Cosmetic dentistry refers to treatments that exist to improve the look of a patient’s teeth and smile. This category includes whitening treatments, veneers, bonding, and straightening techniques like as Invisalign. These operations, although well-known and popular, are often not covered by insurance and must be paid for in full by the patient. Moreover, such expenses would not be tax deductible.

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Where Are Dental Insurance Premiums Tax Deductible?

Most taxpayers may deduct the cost of medical and dental insurance premiums paid during the tax year as a medical and dental expenditure on form 1040 Schedule A. Only the sum of all eligible medical and dental costs, including insurance premiums, that exceed 10% of the taxpayer’s AGI in 2021 (up from 7.5% in 2019), will be included in the total of all itemized deductions.

For example, if a couple has an AGI of $100,000 and $7,000 in eligible medical and dental costs, including dental insurance premiums paid, none of these expenses are deductible. 10% of AGI is $10,000, which is more than the couple’s entire medical and dental costs.

Under certain situations, self-employed persons may deduct dental insurance premiums as an adjustment to income on Schedule 1 rather than as an itemized deduction on Schedule A.

If You Are Self-Employed

You may deduct the cost of dental insurance for yourself, your spouse, and your dependents as an adjustment to income if “you were self-employed and made a net profit for the year reported on Schedule C (Form 1040 or 1040-SR) or Schedule F (Form 1040 or 1040-SR).” Furthermore, the insurance plan must be formed under your company and “may be in the name of the business or in the name of the person.”

You deduct the cost of dental insurance as an adjustment to income on Schedule 1, line 17, without having to itemize deductions on Form 1040 Schedule A, subject to the 10% of AGI limits indicated above.

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Special Considerations

Dental insurance premiums paid with pretax monies through a flexible spending account (FSA) or health savings account (HSA) are not deductible since the IRS does not allow a double tax advantage.

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