Insurance Premiums

• The IRS allows you to deduct your dental insurance premiums only if they weren't paid with pre-tax dollars. If you are getting dental insurance through an employer plan, you are paying with pre-tax dollars. The premiums are taken out of your pay before your payroll taxes are calculated so that your payroll taxes are lower. Because this gives you a tax advantage (less money taken out of your taxes), you can't seek an additional tax advantage on your income taxes.
  
  

Deducting Expenses

• If you are paying for dental insurance outside of an employer plan, the total of your premiums will be added together with your other medical and dental expenses. You can deduct only amount of your medical and dental expenses that exceed 7.5 percent of your adjusted gross income, which is calculated on Form 1040. For instance, if your adjusted gross income is $50,000, 7.5 percent of that amount is $3,750. So the total of your medical expenses must be greater than that to take a deduction. If you had $4,000 in expenses, you could deduct $250 ($4,000 - $3,750 = $250).
  
  

Self-Employed

• If you are self-employed and made a profit, you can deduct the cost of your dental insurance premiums from your income. The plan needs to be established under your business name and the deduction cannot be greater than the amount of profit the business earned. By taking the deduction as a self-employment insurance deduction on your Form 1040, you won't be able to deduct it again on your Schedule A. Otherwise, you would be taking the tax benefit on the premium twice.
  
  

Where To Deduct

• Many of the deductions on Schedule A are based on your adjusted gross income. So if your adjusted gross income is lower, you will be able to more on Schedule A because the threshold will be lower. Deducting your dental insurance premium on Form 1040 (if you are self-employed) will lower your adjusted gross income, making it easier to take larger deductions in other areas on Schedule A.
  
  

Expenses

• If you are going to deduct your dental insurance premiums, don't forget you can also deduct most of your dental expenses on your Schedule A. You won't be able to deduct the cost of cosmetic dental surgery, but you can deduct co-pays on check-up, mileage to the dentists office and the cost of braces. The cost of these expenses gets totaled with your other medical expenses.
  
  

Considerations

• Keep records and receipts of the premiums you pay to maximize your deductions. This will protect you if your deduction is every questioned.