Tax Deductions On Individual And Small Business Health Insurance

by Steve

Talk about Health Insurance and Yuma Health Insurance options is all over town. We are all looking for a way to save money on our health insurance and health care costs.

There are ways to claim deductions for health insurance when you file your taxes. Currently there are a few significant tax deductions for people who are covered by an individual health insurance policy.

Flex Spending Accounts and Health Savings Accounts

Flex Spending Accounts and Health Savings Accounts allows an individual to deposit earnings before taxes into an account and then make a draw on the money for medical related issues. The tax savings happens because you are reducing your income before taxes come out of your check.

Other tax deductible benefits may include the “extras” on your Yuma health insurance policy.  These extras may include dental coverage, life insurance and even prescriptions. These are tax deductible because the rates come out of pre-tax dollars, thus reducing your taxable income and possibly putting you in a lower bracket.

Unlike pensions and stock options, medical expenses, with few exceptions, do not count towards your taxable income as benefits. Make sure you speak with your tax professional in order to decide which route is the best to take to get the maximum deductions possible.

Self Employed Health Insurance

Those individuals who are self-employed can take advantage of a tax break.  Self-employed persons should look into the deduction available for their Yuma health insurance premiums before filing another tax return. This may be available to self-employed individuals who do not itemize their deductions as well as those who do.

Income Percentage

People who itemize their expenses may deduct all of their medical expenses, including premiums paid, up to a certain percentage of total income threshold. This deduction works well for people who are paying for medical expenses and insurance premiums with after-tax income.

Health Coverage Tax Credit

The Health Coverage Tax Credit is a refundable tax credit, granted to those people eligible for Trade Adjustment Assistance.

This tax credit is issued in order to purchase certain types of insurance.

The HCTC is a federal program, which allows individuals to pay only around 20% of an individual policy’s rates for themselves and their families.

The types of insurance allowed are COBRA (Consolidated Omnibus Budget Reconciliation Act), state-qualified health plans, spousal coverage through a spouse’s current group health insurance plan, non-group/individual health plans, VEBA (Voluntary Employees’ Beneficiary Association) and in some instances, ATAA and RTAA Recipients.

Yuma Insurance – Steve Meinhardt

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