What Are Dental Insurance Premiums?
Dental insurance premiums represent ongoing payments by individuals or families to keep their dental insurance plan in force. The insurance will assist in payment for the dental services provided under the insurance plan, including preventive care; routine cleanings; office visits; X-rays; and some restorative procedures.
The amount of the monthly or annual premium will differ by employer, type of plan, geographical location, and whether a person has purchased the dental coverage individually, through their employer, or as part of a larger medical insurance plan
Are Dental Insurance Premiums Tax-Deductible?
Yes, Generally, dental insurance premiums can be deducted from taxable income under certain IRS rules.
The IRS states that only those dental insurance premiums for dental covering preventative and therapeutic dental care can be claimed as a medical expense. This includes dental preventative care, dental hygiene, and other dental treatment to control dental disease.
However, most taxpayers are limited to the deduction for dental premiums if they file a Schedule A (itemizing their deductions) AND their total amount of medical and dental insurance must exceed 7.5% of their adjusted gross income (AGI). (i.e., For a tax year, If your AGI is $50000. 7.5% of $50000 = $3750) The only portion of your total medical and dental expenses that you may deduct is the amount over $3750 for the year. If your total medical expenses were less than this amount, there is no deduction available.
Can You Deduct Dental Insurance Premiums in All Situations?
Whether or not you can deduct your dental insurance premium from your income taxes depends on both your employment status and your tax situation. Here's a summary of both the employer and employee's situation:
- Employees - If you are an employee, your employer will likely deduct all of your premiums from your paycheck using pre-tax dollars. Therefore, the tax benefit has already been applied to your premium payments and you will not be able to deduct your premium.
- Self-Employed - If you are self-employed, and do not have access to an employer-sponsored dental plan, then you may qualify for the self-employed health insurance deduction, which would allow you to deduct the dental premiums as part of the health insurance premium deduction above the line, rather than as itemized deductions.
- Itemizers - If you are an itemizing taxpayer, you may include dental premiums in the itemized deductions, but must first meet the 7.5% AGI threshold of your total medical expenses to be eligible for the deduction
How Much Do Dental Insurance Premiums Cost?
Dental Insurance Monthly Premiums May Average Between $40 - $50. Annual Costs Will Vary From Approximately $600 To $2000 Depending On Type Of Coverage/Level Of Coverage/Deductible, Network (Providers) And Maximum Amount Of Benefits Provided To Individuals.
Recordkeeping and IRS Guidance
To support your deduction you should maintain accurate documentation for:
- Premiums
- Medical/Dental Expenses
- Insurance Statements
For the details of what qualifies as a deductible medical/dental expense you may check out IRS publication 502 (Medical and Dental Expenses) or consult a professional with experience in the field of taxation.