Question : how can i tell if my health insurance benefits are pre taxed?
Keep in mind, your health insurance premiums can't be deducted if they're taken out of your paycheck as pre-tax dollars. However, after-tax health insurance premiums are deductible, but they still are subject to a limitation of 7.5% of your AGI. If you're self-employed, you may deduct a portion of your health insurance premiums as an adjustment. The self-employed deductible portion is 100% in 2007.
- asked by montcoguy0o
All Answers:
Answer #1
Ask your employer. They will tell you. Actuallythey should provide a form for you to sign everyyear verifying your benefit selections and how youwant to have your healthcare premiumstreated.Nearly all healthcare insurance through ajob are part of a Section 125 plan and arededucted pre-tax. You generally have the optionto pay them with tax paid dollars but I'm at aloss to explain how that could be beneficial toanyone.
- answered by bostonianinmo
Answer #2
If you have to ask your employer, your paystatements are NOT well designed. MY paystatement has 3 sections under deductions: Pre-TaxDeductions, Taxes, and Other deductions. Whichsection is your insurance deduction under? Ifthat doesn't help, you will have to ask youremployer. You mentioned self-employment. If youare self employed and need to ask, you NEED anaccountant DESPERATELY.
- answered by STEVEN F
Answer #3
OKay, it's nice that you read a publicationsomewhere (it made for a funny looking questionsince you quoted from the pub).When you get yourW-2, look at box 14, many companies list theamount of health care benefits there. AlsoCompare the amount in box 2 (your wages for socialsecurity purposes) and the amount shown as ytdwages on your last paycheck stub. If your healthcare was pre-tax, the amount in box 2 will be LESSthan the YTD wages on the paycheck.Boston--Pre-taxhealth care lowers your social security earnings. This *will* ultimately reduce the monthly paymentone receives from SSA. It *may* also affect howpension payments are paid out. I happen to be adevout saver--anything I don't pay as taxes now, Isave. My savings should be enough to compensatefor any loss in benefits.The quick estimator atthe SSA web site (plugging in $40,000 and 41,500as the annual income with pre and post taxdollars) shows about a $30 difference in monthlybenefits.At the 15% tax bracket, someone would pay$20/month more in tax now.If FERS uses the $40,000number for retirement (assuming 20 yearsgovernment service) , that would be another $25 amonth as well.
- answered by v b
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