Health Care Issues

April 9, 2024

A taxpayer is allowed an itemized deduction for medical expenses paid during the taxable year and not compensated by insurance or otherwise for medical care of the taxpayer or the taxpayer’s spouse, dependent, or medical dependent.

September 27, 2022

The Health Savings Account (HSA) is one of the most misunderstood and underused benefits in the Internal Revenue Code. Congress created HSAs as a way for individuals with high-deductible health plans (HDHPs) to save for medical expenses that are not covered by insurance due to the high-deductible provisions of their insurance coverage.

April 5, 2018

Beginning in 2014, the Affordable Care Act, also known as Obamacare, imposed what a “share-responsibility payment” on taxpayers who did not sign up for minimum essential health coverage. This payment is essentially a penalty for not being insured.

October 9, 2014

A health savings account (HSA) is a trust account into which tax-deductible contributions can be deposited by qualified taxpayers who have high-deductible medical insurance plans. These accounts are set up at a bank or other financial institution. Income earned on the HSA balance is income tax-free. The funds from these accounts are then used to pay qualified medical expenses not covered by an eligible individual's medical insurance.

September 9, 2014

Taxpayers are allowed a deduction for medical expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, the taxpayer's spouse, or a dependent.

October 15, 2014

Section 4376 of the tax code imposes a fee equal to $2 multiplied by the average number of lives covered under the plan. The fee amount increases based on the percentage increase in the projected per capita amount of National Health Expenditures as determined by the Dept. of Health and Human Services. The amount for policy years and plan years that end on or after October 1, 2014, and before October 1, 2015, is $2.08. The plan sponsor is liable for the fee. The fees are required to be reported annually on the 2nd quarter Form 720 and paid by its due date, July 31st. Fees are based on the average number of lives covered under the policy or plan.

July 16, 2013

Beginning in 2015, large employers, generally those with 50 full-time employees in the prior calendar year, will be affected by the Patient Protection and Affordable Care Act. Watch the video to learn how it may affect you.

September 22, 2022

If your tax deductions normally fall short of itemizing your deductions or even if you are able to itemize, but only marginally, you may benefit from using the “bunching” strategy.

July 24, 2012

It seems the IRS cannot make up their minds related to the self-employed health insurance deduction. Although it made sense that the Medicare premiums paid by a self-employed individual should be allowed as part of the self-employed health insurance deduction, the IRS said no in their 1040 instruction through 2009. Then for 2010 returns, without any fanfare, they quietly modified the instructions, allowing the self-employed individual to include his or her premium in the computation of the self-employed health insurance deduction and suggested prior year returns where the 3-year statute of limitations had not expired could be amended.

July 12, 2012

There has been a great deal of media coverage related to the US Supreme Court upholding the Affordable Care Act, also known as the Health Care Law. The media coverage was generally political and failed to explain the details of how the law will impact individuals. If you are interested in political rhetoric as to whether it is a tax, penalty, or a forced purchase, look no further. The intent of this article is to explain how the Affordable Care Act will impact your pocketbook in 2013, when the healthcare taxes kick in, and in 2014, when the mandatory insurance requirement becomes effective. Here are the details for 2013:

November 25, 2011

After 2012, the limitation on deductible medical expenses increases for most taxpayers from the current 7.5% of AGI to 10% (it remains at 7.5% for taxpayers age 65 and over through 2016). So if you need some dental work, laser eye surgery, or other elective but deductible medical procedures, you might consider doing so sooner than later to take advantage of the current lower AGI limit. (But forget that face lift or other nip and tuck procedure you’ve been thinking about - cosmetic surgery costs aren’t deductible unless related to a physical injury or disfiguring disease.) Also, if you are paying for a procedure over time, it might be appropriate to pay it all at once to increase your currently deductible medical expenses.

July 6, 2014

Applicable Large Employers (ALEs), generally those with 50 equivalent full-time employees in the prior calendar year, that:

August 6, 2015

Taxpayers with disabilities may qualify for a number of tax credits and benefits. Parents of children with disabilities may also qualify. Listed below are several tax credits and other benefits that are available if you or someone else listed on your federal tax return is disabled.

October 8, 2013

To help low income individuals and families afford health insurance the Premium Tax Credit was devised and provides a form of subsidy to help them pay the cost of health insurance. In order to qualify for the credit the health insurance must be obtained through a state insurance Marketplace or the federal insurance Marketplace where a state does not have one.

July 6, 2014

Health coverage provided for an employee's children under 27 years of age is generally tax-free to the employee.

December 10, 2014

The Medicare (aka Hospital Insurance (HI)), tax rate (currently at 1.45%) would be increased by 0.9 percentage points on individual taxpayer earnings (wage withholding and SE tax) in excess of compensation thresholds for the taxpayer’s filing status; see table below. These amounts are not adjusted for inflation, so will remain as shown until changed by Congress.

October 15, 2013

Non-exempt U.S. citizens and legal resident taxpayers will be penalized for failing to maintain at the least the minimum essential health coverage.

December 6, 2014

Each state may establish an Insurance Exchange (more often termed the Marketplace) to help individuals and small employers that reside in their state obtain coverage. If a state fails to establish a Marketplace, its residents must use the Marketplace established by the federal government. The primary purpose of the Marketplace is to provide a source for insurance meeting the requirements of the Affordable Care Act.

October 8, 2014

The itemized deduction for medical expenses are limited in the following manner.

December 9, 2014

For services performed during that year, a covered health insurance provider isn't allowed a compensation deduction for an “applicable individual” (officers, employees, directors, and other

July 6, 2014

The additional tax for HSA withdrawals for other than qualified medical expenses before age 65 is increased from 10% to 20%, and the additional tax for Archer MSA withdrawals for other than qualified medical

July 6, 2010

Small employers (average of 100 or fewer employees on business days during either of the two preceding years) may provide employees with a

December 10, 2014

The health care legislation, the Affordable Care Act (aka Obamacare), signed into law in 2010 affects virtually every individual in one way or another and significantly impacts the preparation of tax returns. The provisions take effect over a period of years and are categorized in this article by the year they became or will become effective. Some of the provisions include additional taxes to offset the cost of the health care benefits included in the legislation for lower-income individuals.

May 27, 2010

The Patient Protection and Affordable Care Act provides a tax credit for an eligible small employer (ESE) for nonelective contributions to purchase health insurance for its employees. The term

November 19, 2014

If your tax deductions normally fall short of itemizing your deductions or even if you are able to itemize, but only marginally, you may benefit from using the “bunching” strategy.

February 27, 2013

Becoming self-employed often means leaving the comfort of employer-provided affordable and easily obtainable health insurance. The following tips may save you some of the frustration you may encounter as a self-employed individual in the market for health insurance.

February 4, 2013

A Health Savings Account (HSA) is a trust account into which tax-deductible contributions can be made by qualified taxpayers who have high deductible medical insurance plans. Income earned on the HSA balance is tax-free. The funds from these accounts are then used to pay “qualified medical expenses” not covered by the medical insurance for an “eligible individual.”

February 21, 2013

The expenses for certain weight-loss programs may be deducted as a medical expense. In order for uncompensated amounts paid by individuals for participation in a weight-loss program to be deductible, the program must be undertaken as treatment for a specific disease or diseases (including obesity) diagnosed by a physician. The costs are not deductible by taxpayers who participate in weight-loss programs to improve their general health or appearance.

February 21, 2013

Auto Travel - Deduction is allowed at a specified cents per mile rate (see table) or for actual cost of gas and oil (not repairs, maintenance, depreciation, lease fees, etc.) when a vehicle is used for medical care purposes.

February 21, 2013

The IRS has ruled that unreimbursed amounts paid by taxpayers for participation in smoking-cessation programs and for prescribed drugs designed to alleviate nicotine withdrawal are expenses for medical care that are deductible subject to the AGI limitation.

February 21, 2013

Amounts paid for long-term care services and certain premiums paid on long-term care insurance are deductible as medical expenses on Schedule A. Costs of care provided by a relative who is not a licensed professional or by a related corporation or partnership don't qualify. The maximum amount of long-term care insurance premiums treated as medical depends on the insured's age and is inflation-indexed annually.

February 21, 2013

Taxpayers can only deduct medical expenses if they itemize their deductions. Beginning in 2013, medical expenses are only deductible if they exceed 10% (was 7.5% in prior years) of a taxpayer's income (AGI), and then only the amount that exceeds that income limit is actually deductible. For seniors (age 65 or older and their spouses) the limitation remains at 7.5% through 2016.

December 8, 2014

Amounts paid for special equipment installed in the home or for improvements may be included in medical expenses, if their main purpose is medical care for the taxpayer, the spouse, or a dependent. The cost of permanent improvements that increase the value of the property may be partly included as a medical expense. The cost of the improvement is reduced by the increase in the value of the property. The difference is a medical expense. If the value of the property is not increased by the improvement, the entire cost is included as a medical expense.

December 6, 2014

Many taxpayers as they get older acquire insurance to cover the costs of their care should they become chronically ill. This type of insurance is referred to as long-term care insurance and amounts paid for long-term care services and certain premiums paid on long-term care insurance are deductible as medical expenses on Schedule A. Costs of care provided by a relative who is not a licensed professional or by a related corporation or partnership don't qualify. The maximum amount of long-term care premiums treated as medical depends on the insured's age and is inflation-indexed annually. The following are the deductible amounts for the past few years. If the taxpayer paid long-term care premiums and qualifies for a medical deduction on Schedule A of their tax return, and did not include the long-term care premiums in their medical deduction, the return can be amended to include the deduction. Please call this office to see if the deduction will make a difference and to have us prepare the amended returns.