Although I am a U.S. citizen and reside in the United States, I spend about half the year abroad. Since Medicare does not cover expenses out of the country, I have an additional health insurance policy purchased in Spain, which I pay for annually. I am not a resident of Spain. Can I deduct the cost of the insurance from my income tax? I understand the rules about medical deductions and would like to include this expense if possible.
Thanks for any advice.
Rita
In general, yes. There are few restrictions on foreign expenses in IRS Publication 502. There might be complications if the insurance covers procedures and medications which would be illegal in the US, but I suspect that if you do not avail yourself of those procedures and medications, it should be accepted. There might also be complications if the insurance covers what would be non-prescription medications in the US; I don't know how that would be handled.
I am not a tax expert by any means, but...
Rita has not clearly stated what she does in Spain for six months each year. Wouldn't she be able to deduct all expenses incurred in Spain, thus including her foreign health insurance premium, only if she did any paid work there? Of couse such paid work would have to be disclosed on her 1040.
As I said, I am not a tax expert so I am curious to hear from the gurus...
You don't have to work to deduct medical expenses. There shouldn't be any problem deducting medical insurance policy costs. The only potential issues that I see are the ones that Arthur Rubin raised. If the Spanish policy pays for medications/medical procedures/etc., that are not-deductible under US tax law (eg., OTC meds, cosmetic surgery, etc.), those payments would be additional taxable income.
Ira Smilovitz
Many thanks to all for your helpful responses. It's good to know that I can deduct foreign medical expenses (even though, in fact, I probably won't have enough expenses to take the deduction). And for tb, I don't work while I'm in Spain. I was happy to learn that it doesn't matter for the medical deduction.
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