Are you self-employed and need a tax break?

Did you know that a Qualified High Deductible health insurance plan coupled with an HSA account can provide a substantial tax deduction to offset earned income? You can fully deduct the cost of self-employed health insurance premiums and also all HSA contributions during the year. Additionally, all distributions out of your HSA account for qualified medical expenses or long term care insurance premiums are tax-free. That’s right tax-free!

So if you are looking for additional tax savings, HSA eligible health plans and HSA accounts may be a great option. Contact our Individual Products Team for more information at 540.722.2529 or 800.467.5425.

Comments

  1. If you can itemize deunitcods,you can claim it and other medical costs as long as the total medical deduction exceeds 7.5% of your gross income. Medical expenses include hospital,doctor,lab,eye exams and insurance premiums,dental and insurance premiums,prescriptions,transportation costs to medical appointments. Some of these also include any money you spend for other people and are not reimbursed for. So if you pay a Dr. bill for a neighbor and do not get repaid for it,you can claim it on your medical. If you help your parent(s) with the cost of their prescriptions,you can claim those costs as well. You do need to keep records to back up your claims for the deduction. Other tax credits and deunitcods also help lower your tax obligation,but they must also exceed your standard deduction for your filing status.

    • Thank you Moshila for the comments. Yes, individuals may deduct premiums and expenses above 7.5% of adjusted gross income, but they cannot deduct expenses within the first 7.5% of AGI. The health care reform law if maintained, will move the 7.5% threshold to 10%. However, self-employed individuals are not subject to the AGI requirement. Self-employed can deduct from the first dollar. And when coupled with an HSA account, contributions to HSA are also deductible and qualified distributions are tax-free!

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