Pellicano Articles
One of the most important aspects of a personal finance budgeting plan that is often overlooked is reducing cash spent on health care costs. We are all searching for a reprieve from our health care and health insurance expenses. A beautiful method to save money on health care is to claim deductions for health insurance when you do your taxes. Right now there are a few significant incom tax deductions for individuals who have an individual health insurance policy.
Firstly, there is the Health Coverage Tax Credit. This tax credit is a refundable tax credit, that is given to individuals eligible for Trade Adjustment Assistance. This tax credit is given in order to purchase specific kinds of insurance. The HCTC is a federal program, that allows individuals to pay only around twenty percent of an individual policy’s rates for themselves and their families. The types of insurance allowed are COBRA (Consolidated Omnibus Budget Reconciliation Act), spousal coverage through a spouse’s current group health insurance plan, state qualified health plans, non-group/individual health plans, VEBA (Voluntary Employees’ Beneficiary Association) and in some instances, ATAA and RTAA Recipients.
Next there are self-employed tax breaks. Those persons that are self-employed should take advantage of the tax break. People that are self employed should look into the deduction available for their health insurance premiums before filing their next tax return. This may be available to self-employed people who don’t itemize their deductions as well as those who do.
There can also be income percentage income tax reductions. Individuals who itemize their expenses should deduct all of their medical costs, which include premiums paid, up to a specific percentage of total income threshold. This deduction works great for persons who are paying for medical expenses and insurance premiums with after-tax income.
There are also Health Savings Accounts and Flex Spending Accounts. Flex Spending Accounts and Health Savings Accounts allow one to put in income before taxes into an account and then take out the money for medical related issues. The tax savings happens because you are reducing your income before taxes come out of your check.
More tax deductible benefits might include the extras on your health insurance plan. Those extras could include dental coverage, life insurance and also prescriptions. These are tax deductible because the rates come out of before tax dollars, thus cutting down your taxable earnings and maybe even putting you in a lower tax bracket.
Unlike pensions and stock options, medical expenses, with few exceptions, don’t count towards your taxable income as benefits. Always make certain you speak with your tax expert to figure out which method is the best to take to get the maximum deductions that are available.
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Tags: health care costs
Posted in Taxes · June 13th, 2010 · Comments (0)
On the basis of estate and tax planning, cash gifts as exchanged from individuals, or between individual and organization, normally follows a standard legal and standard framework. This process is familiar, methodical and rarely questioned as it is conducted according to the boilerplate.
In direct opposition, whenever cash gift exchange follows the standard rules, limitations, etc. apart from the estate and tax planning context, there emerges a distinctly opposed mental perspective to the ideas of what cash can or cannot be exchanged between consenting individuals.
There exists a lawful and accepted function provides legitimacy for handling of those gifts, etc. for those of substantial or of sufficient financial positions. Professional advice is retained as a step in maintain the rules. However, stepping beyond our more familiar context, the exchange of non-corporate gifts carries a penalty of suspicion, and, in a few states, including Iowa and Kentucky, have recorded actual penalties under specific circumstances.
Rationally and functionally, those who seek to examine gifting outside of tax or estate planning scenarios are involved first in a balance of the possibilities, both right and wrong, from the latest and mostly well-intended programs. This examination step leads to a breaking down of a major obstacle of a different sort, one that acts as a key to the gifting concept – that one gives first, initially for the benefit of the recipient, as an act of faith and as a means of attraction to others who have developed the ability to move beyond the same barrier. Honestly, the idea of releasing hard-earned assets goes totally against that which we are taught. We are taught that unconventional, benevolent giving is frequently a basis for fraudulent activity, and that ‘..all that glitters ain’t gold…’ However, benevolence is largely acquired behavior, or not one that is necessarily natural for many, and should be, expected to be the primary trait. The absence of which creates the need for suspicion and scrutiny, based upon the history of previous violations of some less than well-intended approaches historically.
Naturally, or perhaps, incredibly, and in light of the trait of air of suspicion, introduces an opposing perception through estate planning rules, where the win-win outcome is the target of all participants, undoubtedly. Estate and tax planning in itself is a constant struggle toward win-win, to follow the spirit of the tax laws, while seeking the best outcome for the control of ones personal, appreciated and acquired assets.
It is totally up to those who participate in any and all cash gifting, and certainly for purposes not involved in estate planning, to scrutinize the motivations, the processes and programs that exist, to insist that ethics and laws are respected, and to maintain reasonable expectations with regard to what can or should happen as a result of any participation.
Tags: cash, gifting, Gifts, Legal, Taxes
Posted in Taxes · May 22nd, 2010 · Comments (0)