Can COBRA payments be deducted from US tax return?

Is it possible to deduct COBRA payments from a US tax return?
IT GuyNetwork EngineerAsked:
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Kevin CrossChief Technology OfficerCommented:
My understanding is yes because it falls into the category of health care premiums you paid out of pocket.  Since you are on COBRA, you are paying the full premium without subsidy or pre-tax deduction; therefore, it is a legitimate part of your itemized deductions.
JohnBusiness Consultant (Owner)Commented:
Yes, but there are some rules. Most basic is you had to make the payments. Here is some useful information for you.

https://ttlc.intuit.com/questions/2009936-are-cobra-payments-tax-deductible
Kevin CrossChief Technology OfficerCommented:
It is on the Schedule A if my itemized deductions reference didn't assert that - https://www.irs.gov/instructions/i1040sca
The limits as you will see are the normal ones with respect to your adjusted gross income and the standard deduction.  If you do not have enough itemized expenses to surpass the standard deduction, then it is not like you will get a credit for the COBRA above and beyond that unfortunately.  As a father of six, I can attest to family insurance on COBRA or otherwise self payment (as I am now as a consultant) definitely is a significant expense every month.  Think most folks do not realize that many companies pay 75% of the premium until they end up on COBRA.   I did it a year myself, so know your pain.

By the way, I see QuickBooks zone is in the question, so potentially you are a business owner.  If yes, you can see if you can qualify to pay your premiums as a business expense since you do not qualify for a subsidized plan (an assumption given you are on COBRA).  It comes off the top, so it reduces your Schedule C income potentially to zero (cannot go negative).  If you are an S-Corp, you still can do this.  Just when you show your W2 since you have to pay yourself a reasonable salary, you must include the amount you paid in premiums as income.  Payroll module for QuickBooks Online handles this nicely if you are using that.

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Kevin CrossChief Technology OfficerCommented:
Sorry for any duplication, John.  I started to post that link too given the QuickBooks connection but went with the IRS site since it went into the details of the rule but still meant to include that link for reference on where in TurboTax to find the walk through, so I am glad you posted that.
IT GuyNetwork EngineerAuthor Commented:
I'm not a business owner.

I was laid off in June, went on COBRA and am currently working on a 1099 basis for another company so I have stayed on COBRA.

Will I be able to take deductions for both the interest paid on my home mortgage and for the amount that I have paid on COBRA when I file my taxes for 2017?
JohnBusiness Consultant (Owner)Commented:
So long as you made the payments, yes. Fill out your schedules properly. Make sure the other (new) company is not subsidizing.
Kevin CrossChief Technology OfficerCommented:
Agree with John.  I have done it.  Since you are itemizing anyway, remember to include all your other medical and dental bills again as John is asserting if you paid out of pocket.  If you got reimbursed from a Flexible Spending Account or paid via your Health Savings Account, you cannot deduct the medical expense but do know that you can contribute to HSA and FSA pre-tax, so if you are paying out of pocket on an after tax basis.  The rule just notes it has to be you or someone other than your employer.
IT GuyNetwork EngineerAuthor Commented:
Will I be able to take deductions for both the interest paid on my home mortgage and for the amount that I have paid on COBRA when I file my taxes for 2017?
Kevin CrossChief Technology OfficerCommented:
We already answered yes.  You definitely can.
JohnBusiness Consultant (Owner)Commented:
Yes you can do this.
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