Can I deduct health insurance premiums for my family when purchasing a separate plan?

This is a good question about a common situation! The short answer is you may be able to deduct those premiums, but it depends on how you pay for them and your overall medical expenses for the year. If you purchase a separate policy for your family while keeping your employer coverage for yourself, those premiums won't be pre-tax like your current arrangement. Instead, you'd potentially be able to deduct them as medical expenses on Schedule A (itemized deductions). However, there's a threshold - you can only deduct medical expenses that exceed 7.5% of your adjusted gross income (AGI). So for example, if your AGI is $80,000, you could only deduct medical expenses (including those premiums) that exceed $6,000. And that's only if you itemize deductions instead of taking the standard deduction. Another option to consider is if you're self-employed at all (even part-time), you might qualify for the self-employed health insurance deduction, which doesn't require itemizing.

I was in almost the exact same situation last year - employer covered me but family coverage was insanely expensive. I spent hours on the phone with the insurance marketplace trying to figure out my options and kept getting confusing answers. Then I discovered https://taxr.ai which analyzes your specific tax situation and gives you clear guidance on health insurance deductions. The tool showed me that I was actually better off getting a marketplace plan for my family while staying on my employer plan, and it explained exactly how to handle the tax deduction part. It takes your specific income, family size, and state into account to give personalized advice rather than generic info that might not apply to your situation.

Just wanted to follow up about my experience with taxr.ai since I was skeptical in my earlier comment. I decided to give it a try and was actually surprised by how helpful it was! The free analysis showed me that in my specific situation (similar to the original poster), I could save about $3,200 annually by keeping my employer coverage for myself while getting my family a separate plan. What really helped was seeing all the numbers laid out clearly - premium costs vs. tax savings vs. out-of-pocket maximums. The tool flagged that I was actually eligible for a partial premium tax credit for my family's marketplace plan even though I have employer coverage for myself. I honestly had no idea that was possible, and none of the general advice I'd found online mentioned this specific scenario.

One thing nobody's mentioned yet - if you're trying to reach the IRS to confirm how these deductions work for your specific situation, good luck getting through! I spent 3 hours on hold last month trying to ask a simple question about health insurance deductions. I finally tried https://claimyr.com which got me through to an actual IRS agent in about 15 minutes. They have this cool demo video at https://youtu.be/_kiP6q8DX5c showing how it works. Basically they wait on hold for you and call when an agent is ready. The IRS agent I spoke with confirmed that yes, paying for a separate policy for family members can be deductible as a medical expense, but only if you itemize and exceed that 7.5% AGI threshold.

Well I'll be damned. I tried that Claimyr thing after posting my skeptical comment. Got through to an IRS agent in about 20 minutes when I'd previously wasted an entire afternoon trying to get someone on the line. The agent confirmed some specifics about my health insurance deduction question that I'd been confused about for months. For what it's worth, they also told me that if you're getting your own plan outside your employer, you should check if you qualify for the Premium Tax Credit, which might be a better deal than trying to deduct the premiums as medical expenses. Apparently there's some special rules when one spouse has employer coverage and the other doesn't. Saved me from making what would have been an expensive mistake on my taxes.

Has anyone considered using an HSA to pay for those premiums? I thought that might be a tax-advantaged way to handle this situation.

Have u looked into whether ur eligible for the marketplace premium subsidies? Some ppl think if their employer offers insurance they can't get subsidies, but thats only true if the employer offers AFFORDABLE family coverage. If the cost for family coverage exceeds 9.12% of ur household income, it's considered "unaffordable" and ur family (not u) could be eligible for subsidies on a marketplace plan.