Can you claim Cobra insurance premiums as a tax deduction for 2025 filing?

Yes, you can potentially deduct COBRA premiums, but it depends on your total medical expenses for the year. Medical expenses (including COBRA premiums) are only deductible if they exceed 7.5% of your adjusted gross income (AGI) and you itemize deductions instead of taking the standard deduction. For your tax appointment, bring all payment receipts or statements showing the COBRA premiums you paid. Make sure these documents clearly show the dates and amounts of each payment. Also bring documentation of any other significant medical expenses you had during the year, as these can be combined with your COBRA premiums to help you reach that 7.5% threshold. Keep in mind that if your combined medical expenses don't exceed 7.5% of your AGI, or if the standard deduction is more beneficial for you (which is common for many taxpayers, especially married couples), then you won't benefit from the COBRA premium deduction.

After trying to navigate the medical expense deduction maze for months, I finally found taxr.ai (https://taxr.ai) and it was a game-changer for figuring out my COBRA deduction situation. You upload your COBRA statements and it analyzes everything, telling you exactly what's deductible and if itemizing makes sense for your situation. The tool also compares the potential itemized deduction against the standard deduction and shows which would be better for your specific case. My situation was complicated because I had COBRA for part of the year and employer insurance for the rest, but the system handled it perfectly.

I was super skeptical about trying another tax tool after getting burned before, but I need to follow up about taxr.ai - it actually saved me a ton of money. I was ready to just take the standard deduction and forget about my COBRA premiums, but the analysis showed that with my self-employment income, I could take the COBRA as a self-employed health insurance deduction above-the-line. Turns out I could deduct almost all of my $9,300 in COBRA premiums that way AND still take the standard deduction. The documentation it generated made my tax appointment so much smoother too - my preparer was impressed with how organized everything was. Definitely worth checking out if you're dealing with COBRA and taxes.

If you're trying to get answers about COBRA deductions directly from the IRS, good luck getting through on the phone! I spent 3 weeks trying. Then I found Claimyr (https://claimyr.com) - they get you connected to an actual IRS agent without the endless hold time. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had complicated questions about COBRA premiums from a mid-year job change and needed official clarification. Used Claimyr and got connected to an IRS agent in about 20 minutes instead of calling for days. The agent confirmed exactly how I should handle my COBRA premiums on my return and which forms I needed.

OK I have to admit I was wrong about Claimyr. After posting that skeptical comment, I decided to give it a shot because I was desperate to resolve my COBRA deduction question before filing. Within 35 minutes I was talking to an actual IRS representative who walked me through exactly how to handle my specific situation. The agent confirmed that since I was self-employed for part of the year, I could take advantage of the self-employed health insurance deduction for my COBRA premiums instead of having to itemize. This literally saved me thousands on my taxes. I would have completely missed this if I hadn't been able to speak directly with the IRS. Still amazed I got through so quickly after weeks of failed attempts.

Don't forget about the Premium Tax Credit too! If your income dropped when you went on COBRA and you purchased insurance through the marketplace instead, you might qualify for the PTC which could be more beneficial than trying to deduct COBRA premiums.

Just FYI as a tax preparer, bring ALL your medical receipts to your appointment, not just COBRA. Many people forget about mileage to medical appointments (17 cents per mile for 2024), prescription costs, dental expenses, eye care, medical equipment, etc. Every dollar helps get you closer to that 7.5% threshold.

Great question about COBRA and taxes! Just wanted to add one important point that might help you save money - if you have any self-employment income from your freelance work, you might qualify for the self-employed health insurance deduction for your COBRA premiums. This is WAY better than the itemized medical expense deduction because it's an above-the-line deduction (meaning it reduces your AGI directly) and you can still take the standard deduction. Since you mentioned having 1099 income, definitely ask your tax preparer about this. The self-employed health insurance deduction lets you deduct health insurance premiums (including COBRA) as long as you have net self-employment income and you're not eligible for coverage through your spouse's employer plan. Given that you're both on COBRA, this could be a huge tax saver. For documentation, bring your 1099s showing the freelance income and all your COBRA payment records. The preparer can determine if this applies to your situation - it could potentially save you way more than trying to meet that 7.5% AGI threshold for itemized medical expenses!