insurance premiums
insurance premiums

Are Health Insurance Premiums Tax-Deductible?

Health insurance is expensive, but several tax breaks can help you pay your premiums and deduct your health care expenses. The new tax laws in 2021 expanded these benefits even further, which can be particularly helpful to people who have lost their jobs or bought their own health insurance coverage. You may be able to receive additional breaks when filing your 2021 income-tax return.

What Are Health Insurance Premiums?

Whether you have health insurance through your employer or on your own, or even if you’re covered by Medicare, you usually have to pay monthly premiums for your coverage. But your premiums may be tax-deductible, or you may be able to take other tax breaks that can help reduce your costs and stretch your health care dollars. Here’s how to figure out whether you are eligible for these tax benefits and what you need to do to get them.

Tax-Deductible Premiums for the Self-Employed

Your health insurance premiums can be tax-deductible if you have income from self-employment and you are not eligible to participate in a health plan offered by an employer (or your spouse’s employer). Your Medicare premiums may also be tax-deductible if you’re self-employed, says Morris Armstrong, an enrolled agent in Cheshire, Connecticut. “That is something people do not always realize,” he says.

You don’t have to itemize to be eligible – you take the deduction on Schedule 1 of Form 1040. The deduction is limited to the net profit from self-employment income you reported on Schedule C, says Jina Etienne, a certified public accountant in Silver Springs, Maryland.

Even if you had employer-sponsored health insurance for the first few months of the year, then lost your job and started doing some freelance work, you may be able to deduct some of the premiums you paid for the month

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When Are My Health Insurance Premiums Tax-Deductible?

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SmartAsset: is health insurance tax deductible

Health insurance premiums can be tax-deductible under some circumstances. Taxpayers who itemize may be able to use this deduction to the extent that their total medical and dental expenses, including health insurance premiums, exceed 7.5% of adjusted gross income. Self-employed people may also be able to deduct premiums for dental, health and long-term care insurance for themselves, spouses and dependents. Premiums may also qualify for special tax treatment for those who get coverage from the Health Insurance Marketplace or COBRA continuation insurance.

Consider asking a financial adviser for details on whether your health insurance premiums can be deducted at tax time.

Itemizing Health Insurance Deductions

Health insurance premiums as well as expenditures for medical and dental care, such as doctor visits and prescriptions, may be deductible if you itemize deductions on your tax returns. You may also be able to deduct premiums for a qualified long-term care insurance policy.

However, you can only deduct the amount of these expenses that exceed 7.5% of the adjusted gross income (AGI). That is, if your adjusted gross income is $100.00 and your total combined medical expenses including health insurance come to $10,000, you will only be able to deduct $2,500. That is the amount your medical expenses of $10,000 exceed 7.5% of your AGI, or $7,500.

Another limitation can affect employees whose employers offer cafeteria plans or other benefit programs that pay all or a portion of health insurance premiums for employees using pre-tax funds. Employees who get premiums paid pre-tax in this fashion can’t deduct them unless the amount of the employer-paid premiums are included in wages, tips and other compensation and listed in Box 1 of the employee’s Form W-2.

Self-Employed Health Insurance Deductions

SmartAsset: is health insurance tax deductible

SmartAsset: is health insurance tax

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Report: Virginian’s out-of-pocket costs for health insurance continue to surge

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A new report on health care costs and spending data in the Commonwealth shows that while Virginians spend less on health care than the national average, their out-of-pocket costs for health insurance premiums and deductibles continue to surge year-after-year.

The Altarum Institute, a non-partisan, non-profit research and consulting organization, examined 2021 Virginia health care spending based on data from the Centers for Medicare & Medicaid Services, Virginia’s All-Payer Claims Database and other public sources.

The analysis shows that the average single health insurance premium was $7,300 and the average family health insurance premium was $21,300 for people with private sector employer-sponsored health care coverage.

According to the Altarum report, these rates are “nearly identical to national averages, despite Virginia’s lower-than-average per capita health care spending.”

Growth in Virginia insurance premiums has steadily increased, increasing from “22.5 percent and 21.5 percent, respectively, between 2015 and 2021, while combined premiums and deductible totals have increased even faster (31.1 percent for single coverage and 27.7 percent for family coverage).”

Looking over a longer horizon, the report finds that since 2008 “single annual premiums have increased 74.3 percent, and family premiums have increased 78.9 percent,” while the “combined totals of average premiums and deductibles have risen even faster, 89.1 percent for single coverage and 91.3 percent for family coverage.”

The sharp increase in premium and out-of-pocket costs is also “significantly greater than the underlying private per-enrollee health care spending trend, which has increased by 45.7 percent over the same period.”

These trends are even more glaring when viewed in context of the COVID-19 pandemic peak period of 2020 and 2021 when health insurance premiums and cost-sharing expenses for individuals and families continued to rise despite a sharp drop in health care utilization and health care spending .

In contrast to

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ottonova’s quick guide through the German health insurance jungle

German health insurance can be confusing, especially for expats and newcomers who don’t speak the local language. But this should not stop you from getting the best possible coverage. ottonova brings you this quick and easy guide to the jungle that is German health insurance – so you can find your way around easily.

Anyone who lives and works in Germany needs health insurance – that’s simple. But what’s not so simple is navigating the system if you’re not sure how it works, or what’s on offer. Here’s the lowdown.

How does the German health insurance system work?

Germany operates a so-called dual-payer or two-tier health insurance system, in which the majority of healthcare is government-funded, but a secondary, privatized form of healthcare also exists.

Under the public system, younger policyholders pay for the treatment and care of the sick and the elderly, while the private system focuses on the individual but assumes solidarity between the healthy and the sick. Private policyholders’ premiums cover their own rising healthcare costs as they grow older.

How many types of health insurance are there in Germany?

There are two main kinds of health insurance in Germany: public health insurance (gesetzliche Krankenversicherung) and private health insurance (private Krankenversicherung).

public health insurance (gesetzliche Krankenversicherung)

Almost without exception, everyone in Germany is eligible for public health insurance. As a public system, the premiums are based on income – so the more you earn (up to a certain limit), the more you pay.

private health insurance (private Krankenversicherung)

If you are a high earner, self-employed or a public official, you may be eligible for private health insurance. Your premiums are determined by the level of coverage you choose, the age at which you enter the private system, and

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