Health Insurance Premiums - Via your employer

The simple answer is that in most cases, you can’t deduct your share of health coverage costs for a group plan offered through your employer.

The reason? Most premiums are paid with pre-tax dollars, which means they are deducted from your wages before taxes are applied. Deducting them again as a medical expense would be “double-dipping.”

You can only deduct the premiums if your employer included them in Box 1 (Gross Wages) of your W-2. However, this is highly unusual and contrary to the standard practice.

Similarly, HSA and MSA contributions that come out of your paycheck aren’t deductible either, as these contributions are funded with pre-tax dollars.

**Uncertain whether your health insurance premiums are taken out of your paycheck pre-tax or after-tax? Talk to your payroll department, or check your W-2. If your premiums are paid with pre-tax money, that money will not be included as income in Box1 (wages) on your W-2. If your premiums are paid with after-tax money, that money will be included as income on your W-2. If your premiums weren’t included as income on your W-2, you cannot take them as a deduction because they’re already tax-free.**

Need help understanding the process, give us a call here at Tri-Valley Tax & Financial Services, Inc.

(925) 469-1040 We can help!

http://www.trivalley.tax

Source: Intuit, finance.com, irs.gov