Available tax deductions for health costs
Section 105 Tax Deductions for Self-Employed
This deduction is available if you have a spouse working as an employee in your business OR you are a C-corporation.
Health insurance premiums are deductible for federal tax purposes. However, your spouse must legitimately be an employee, providing
services to your business. The deduction is available for ALL family members covered by the spouse's plans - including
the business owner. Usually third party administrators are used
to establish the tax deductibility, so there is a monthly service fee. The largest third party administrator is Agriplan/Bizplan at
http://www.agriplan-bizplan.com
Bank Health Savings Accounts (HSA)
This program is available to people who have high deductible medical plans. An HSA qualified health plan is a health insurance plan with a minimum deductible of $1,150 (single coverage), or $2,300 (family coverage). Maximum annual in-network
out-of-pocket expenses are $5,800 (single coverage) or $11,600 (family coverage). If you have this type of medical plan,
you can go to your bank and open a health savings account. You can make deposits into that account, and any medical expenses
paid with this account(EXCEPT health insurance premiums) will be deducted from your taxable income at year-end. This allows you to save from 15 to 35% on your
medical expenses. The money contributed to your health savings account rolls over to future years, so you do not lose it.
For more information, contact your local bank.
