Tax season is in full swing. As a business owner, it is smart to evaluate all tax write 
offs, deductions and credits available. So what about health insurance? the costs of health insurance can be a tax deduction? In some cases, yes. In this article we will summarize the various tax advantages for small insurance companies scenarios.
Tax deductions on health insurance for companies
When your company offers a system of official health benefits, or a formal contribution to the costs of employee health, the load can usually be written off as a business deduction
types of benefit plans and contributions are tax deductible to the company: ..
- payments to group health insurance premiums
- payments ( "refunds") made through medical reimbursement of official plans, such as a health reimbursement plans ( HRPS) or reimbursement of medical arrangements (HRA).
- Payments ( "contributions") made to health savings accounts (HSA).
In these scenarios, employees also receive tax benefits. For example, payments to employees of the group health insurance premiums or HSA contributions can be paid with pre-tax contributions. And reimbursements received by an HRP or HRA will be received (not included in employee gross income) tax free.
More information on the health benefits of tax-free employees can be found in IRS Publication 15-B.
See also: Tax-Free vs. Taxable Health Insurance Contributions
sickness insurance deductions for self-employed
If you're self-employed, you may have additional opportunities for health insurance deductions.
most independent taxpayers can deduct health insurance premiums, including premiums based on age to cover long-term care via line 29 deduction on 1040 returns to be eligible, your business income must show a profit and you may not be eligible for insurance provided by the employer (eg from a side job or the work of a spouse), Entre. other criteria
Learn more about the health insurance deductions for.
Tax credits on the independent health insurance for companies
more tax deductions, some small businesses may be eligible for health insurance tax credits. In the context of health reform, there are tax credits available to small employers that meet all three of these requirements:
- The company employs fewer than 25 employees , who make an average of $ 50,000 or less annually.
- The company offers a group health insurance policy and covers at least 50 percent of premium costs.
- The company purchases the policy through the market SHOP, SHOP if the plans are available.
Eligible companies can receive up to 50 percent of the contribution to employee premium costs. Companies are not required to offer coverage to part-time employees to be eligible.
Learn more about the tax credits for health insurance for small businesses.
Tax credits on health insurance for employees
In addition to the tax credits for employers, there are tax credits offered health insurance eligible employees who purchase health insurance on their own. The health insurance tax credits can significantly reduce the cost of health insurance.
To be eligible for tax credits for health insurance premium, you must:
- buy a font available on the Marketplace (the former: Healthcare.gov ) of your state.
- meet certain income limits.
- Do not be eligible for health insurance provided by the employer.
- Do not be eligible for a program provided by the government such as Medicaid.
Example tax-free health insurance Money
To illustrate the tax benefits of a common approach to small business, an example of the tax benefits of the use of a formal health plan to pay the health insurance premiums.
a company of 20 people in Seattle, Washington provides $ 300 per month for employees to purchase their own health insurance policy. To do this in a manner consistent and tax-free, the company uses a formal health repayment plan to reimburse employees for the cost of eligible premiums.
For the employer, all repayments made by the health plan reimbursement Section 105 are not subject to payroll taxes (FICA / FUTA). This effect, the cost of providing a benefit of $ 300 / month $ 300 / month. As shown in the graph below, the company saves $ 23 / month per employee compared to provide a taxable bonus or raise.
Employees also realize tax savings. Employees receive reimbursement through the formal plan is not taxed. As shown in the graph below, an employee who receives $ 300 reimbursement through a tax-free plane receives $ 75 more each month, compared to a taxable benefit.
For more details on how the tax benefits of a work of healthcare reimbursement plan, watch this webinar tutorial 2 minutes.
Conclusion
for short, can the health insurance costs as a write-off tax for businesses and homeowners? Yes. In certain situations and certain offers benefits, there are tax deductions, exclusions, credits and benefits to both employers and employees.
What questions do you have about health insurance costs and taxes? Leave a comment below and we would be happy to help.
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