What type of insurance premiums can exceed 7.5% of AGI for potential deductions?

Long-term care insurance premiums can exceed 7.5% of Adjusted Gross Income (AGI) for potential deductions because they are specifically recognized under tax law as qualifying medical expenses. The IRS allows taxpayers to deduct unreimbursed medical expenses that exceed a certain percentage of their AGI, and long-term care insurance falls into this category.

The allowable deduction for long-term care premiums depends on the taxpayer's age and other factors, which can allow for a significant expense threshold. This treatment acknowledges the growing costs and financial burden associated with long-term care.

In contrast, health insurance premiums may also be deductible but are typically subject to the same 7.5% threshold without the additional stipulations tied to age. Life and disability insurance premiums generally do not qualify for deductions in the same manner, as they are viewed primarily as personal expenditures related to insurance protection rather than as medical expenses. Understanding these nuances is crucial for tax planning and maximizing potential deductions.