Health Insurance and Taxes

Wednesday 9 June 2010 - Filed under Employment Texas + Health Care Insurances

One common question that always arises when it comes to taxes is whether or not health insurance premiums are tax deductible. The answer depends on the nature of your employment.

If your company has what is called a cafeteria plan, then the chances are that your out-of-pocket expenses are tax-free. A cafeteria plan basically provides employees with the option to spend part of their income on things such as healthcare – with the benefit that the money spent is tax-free.

Obviously, if your company does not have a cafeteria plan, then you just might have to pay taxes on your health insurance premiums.

Now if you are self-employed, then you are in a better position. The premiums that you pay towards your policy are tax-deductible. More so, provided that your dependents are not covered by another health insurance policy (say, your spouse’s company’s group health plan), you can also declare their premiums as tax-deductible.

2010-06-09  »  admin