Reduce the impact of health care costs: tax deduction of costs of health care

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Reduce the Impact of Health Care Costs: Tax Deductions for Health Care Costs | Personal Finance Cornerfunction HideSponsor(){document.getElementById('Search_InputBox_Sponsor').style.display = 'none';document.getElementById('Search_InputBox_Sponsor').disabled = true;document.getElementById('Search_InputBox').style.display = 'inline';clearSearchBox('searchinput_id');}function clearSearchBox(data){thisdata = document.getElementById(data);thisdata.value = '';thisdata.focus();}Sign In | Join |  | About Home   Finance Resource Center   2011 AllBusiness AllStar Franchises   Franchises for Sale  Shop Legal Forms  Small Business Blog  Download Center  Business Resource Center   Starting a Business Planning for Success Buying a Business Structuring Your Company Funding Your Startup Protecting Your Startup Franchises Operating Your Business Green Business Business Travel Insurance Office Management Legal Exiting Your Business Sales & Marketing Marketing & Advertising Public Relations Customer Service Sales Finance Accounting Budgeting Business Credit Personal Finance Pricing Taxes Human Resources Career Advice Management & Leadership Workers’ Compensation Workplace Health & Safety Technology Business Software Internet & Online Business Hardware Security Mobile Business Library AllBusiness Blogs Professional Journals Videos Podcasts Glossary Legal Forms Company Profiles Resources Business Directory Franchise Directory Quote Center Trade Magazines Industries Related Topics:Financial Markets & Investing | Health Care Costs | Tax Deductions | Taxes & Taxation | Health Insurance | Insurance Premiums | Income Tax | Personal DebtPersonal Finance Corner  Reduce the Impact of Health Care Costs: Tax Deductions for Health Care CostsWednesday, March 9 2011
Share:Print  ArchivesMore.at300bs{float: left; margin-right: 1px;}Miranda Marquit
TTT Contact  We all know that health care costs continue to rise -- including the cost of health insurance. One way you can reduce the impact that health care costs have on your finances is to consider the tax deductions available. This is especially important if you are self-employed (like I am). Keith Mendonsa, at eHealthInsurance.com, offers some helpful tax tips related to health care costs: Deduct health insurance premiums on Schedule SE: For tax year 2010 only, you can actually deduct your health insurance premiums on Schedule SE (as long as there is no one else helping you pay them). This is in addition to the above the line premium deduction you are probably aware of as a self-employed person.
Itemize health insurance and medical expenses: If your un-reimbursed medical expenses account for more than 7.5% of your AGI, you can itemize your expenses, including the cost of dental care, co-pays and other expenses that might not be reimbursed. It's a way to get a little extra help on Schedule A - on top of your above the line deduction. Realize, though, that you can't deduct anything you claim above the line on Schedule A.
Contribute to a Health Savings Account: The great thing about the HSA is that you can make contributions for tax year 2010 until April 18, 2011. This will help you get on the right track for the coming year as well, since the account can be used to pay health care costs -- effectively rendering them all tax deductible.Mendonsa also recommends that you be aware of how the COBRA subsidy can affect your taxable income. Here is what he points out:

Persons enrolling in COBRA as the result of a lay-off after June 1, 2010 no longer qualified for the 65% federal COBRA subsidy, but plenty of people who did qualify for the subsidy were still receiving it in 2010. If you received the COBRA subsidy, your taxable income may increase depending on how much money you made in 2010. If your adjusted gross income was between $125,000 and $145,000 ($250,000 - $290,000 for those filing joint returns), you may only be eligible to retain a portion of that subsidy. If your adjusted gross income was greater than $145,000 ($290,000 for joint-filers), you are not eligible for the subsidy and should review your tax liability for the subsidy carefully.

As always, it is a good idea to consult with a tax professional to make sure you are taking your deductions properly. There are ways you can alleviate some of the pressures that come with rising health care costs. Go over your options, and see what you qualify for, and take the tax deductions available to you.

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