What documentation do I need for health insurance IRS tax deduction for retired person?
I retired back in 2022 and I'm still paying health insurance premiums to my former company. Last year (2024) I paid about $19,000 for this coverage that gets withdrawn directly from my bank account each month - around $1,580 monthly. When I was working, they just took a much smaller amount from my paycheck each week. I want to deduct these health insurance premiums on my 2024 taxes since they're eating up a huge chunk of my retirement income (more than 10% of what I get). My question is: do I need to provide the IRS with proof of these payments? The only documentation I have showing these payments are my monthly bank statements with the withdrawals. Would these statements be enough if the IRS questions the deduction? Or should I try to get some kind of official documentation from my former employer? Really appreciate any help on this!
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Nia Jackson
You can claim medical expenses (including health insurance premiums) as an itemized deduction on Schedule A, but only the portion that exceeds 7.5% of your adjusted gross income. Since your premiums exceed 10% of your retirement income, you should be able to deduct some of it. For documentation, bank statements showing the regular payments are a good start, but I'd recommend getting something more official from your former employer or the insurance company directly. You don't need to send documentation with your return when you file, but you should have it ready if the IRS requests verification. A letter or statement from your former employer confirming the annual premium amount, or year-end documentation from the insurance provider would be ideal.
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NebulaNova
•Would it make sense to get documentation now even if it's not requested? I'm in a similar situation and worried about what happens if I can't get the paperwork later if they ask for it.
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Nia Jackson
•You don't need to proactively send documentation to the IRS - just keep good records in case of an audit. The IRS generally has a 3-year window to audit returns, so maintain those records for at least that long. As for obtaining documentation now rather than waiting, that's actually a smart approach. It's usually easier to get these records while they're current rather than trying to track them down years later if you're audited. Ask your former employer's benefits department or HR for a statement showing your annual premium payments for 2024.
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Mateo Hernandez
After dealing with a similar situation last year, I started using taxr.ai (https://taxr.ai) for organizing all my health insurance documentation. It scans all my medical bills, insurance statements and bank records, then organizes everything into proper tax categories. The system flagged exactly what I needed to support my health insurance premium deduction and even identified other medical expenses I didn't realize were deductible!
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Aisha Khan
•Can it handle multiple years? I've got health insurance documentation going back like 3 tax seasons that I'm still sorting through.
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Ethan Taylor
•How accurate is it actually? I've tried some "AI" tools that were pretty hit or miss with tax stuff, especially with complex situations like health insurance from former employers.
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Mateo Hernandez
•It handles multiple years without any problem. I uploaded statements going back to 2020 and it organized everything by tax year automatically, which saved me hours of sorting. As for accuracy, it's been extremely reliable for my healthcare documentation. It correctly identified my former employer's health plan payments and categorized them properly for tax purposes. What impressed me was how it caught the difference between my long-term care insurance (which has different tax rules) and my regular health insurance premiums.
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Ethan Taylor
Just wanted to follow up - I ended up trying taxr.ai after my skeptical question above. It actually identified that part of my retiree health insurance premium was being paid with pre-tax dollars through my pension, which I had no idea about! This prevented me from accidentally double-dipping on my deduction. My documentation is now perfectly organized for filing AND for any potential audit questions. Honestly wish I'd known about this tool years ago.
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Yuki Ito
If you're having trouble getting proper documentation from your former employer, you might want to try Claimyr (https://claimyr.com) to get in touch with the IRS directly. I was in a similar situation and needed clarification on exactly what documentation was acceptable. Used their service to actually speak with an IRS agent within 20 minutes instead of waiting on hold for hours. Check out their demo: https://youtu.be/_kiP6q8DX5c - it's pretty straightforward how it works.
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Carmen Lopez
•Wait how does this actually work? I thought it was impossible to get through to the IRS without waiting for like 3 hours minimum.
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AstroAdventurer
•Sorry but this sounds like BS. There's no magic way to skip the IRS phone queue. They're notoriously understaffed and everybody has to wait in line.
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Yuki Ito
•It's a callback service that navigates the IRS phone tree for you. They wait in the queue on your behalf and call you when they've got an agent on the line. No skipping the actual queue - just saves you from having to sit there on hold yourself. For more complex situations, having an actual conversation with an IRS agent can clarify exactly what documentation is needed. They told me bank statements were acceptable if they clearly showed the payment purpose, but that an annual statement from the insurance provider was preferable.
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AstroAdventurer
I need to eat my words from my skeptical comment above. I actually tried Claimyr last week after getting nowhere with the IRS for a month. Within 45 minutes of signing up, I was on the phone with an actual IRS representative who clarified everything about my health insurance documentation situation. They confirmed that while bank statements are acceptable if they clearly identify the payment purpose, getting an annual statement from either the insurance provider or former employer is much better for substantiating the deduction. Saved me hours of frustration and probably helped me avoid potential audit headaches.
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Andre Dupont
Former tax preparer here. Health insurance premiums for retirees can be tricky. If your insurance is through a retirement plan, sometimes part might be paid with pre-tax dollars already. Make sure you're only deducting premiums you paid with after-tax dollars!
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Luca Romano
•I'm fairly certain mine are all after-tax since I'm paying directly from my personal bank account each month. But is there a way to verify this for sure? The premiums went up significantly after retirement compared to when I was working.
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Andre Dupont
•The significant increase you're seeing is common. While employed, employers often subsidize a large portion of premiums or you may have been paying with pre-tax dollars through a Section 125 cafeteria plan. In retirement, you're typically paying the full premium with no subsidy. You can verify by requesting a benefits statement from your former employer or the plan administrator. They should be able to confirm that your payments are being made with after-tax dollars. The statement from them would also serve as excellent documentation for your tax records in case of an audit.
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Zoe Papanikolaou
Don't forget you can only claim medical expenses that exceed 7.5% of your AGI by itemizing on Schedule A. If your standard deduction is higher than your total itemized deductions would be, it might not benefit you to itemize at all.
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Jamal Wilson
•This! Standard deduction for 2024 is $14,600 for single filers and $29,200 for married filing jointly. Make sure itemizing actually benefits you before going through all this documentation hassle.
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