Health Insurance Open Enrollment - Don't Get a Tax Penalty for Not Having Coverage
As many of your know open enrollment for Medicare Supplements are not available. Each year you have the opportunity to review your supplement and make choices if you want to keep the same one or change. While supplements are not required for tax purposes, they are something to consider for co-payments. Health costs continue to rise and the 80% which Medicare pays is often not near enough to cover the expenses associated with even the smallest of illness.
Medicare and Supplement insurance premiums are deductible on your tax return if you can itemize and get over the threshold to deduct medical expenses. In 2016, that threshold increases for all Americans to 10% of your adjusted gross income. Therefore if your AGI is $100,000 then your medical bills, including insurance premiums, would have to exceed $10,000 before any coverage would be afforded.
For those not covered under Medicare, open enrollment for the market place insures and most companies begins November 1, 2015. Failure to have proper insurance coverage can result in hefty penalties imposed on your tax return. It is a requirement that you can prove your medical coverage if asked by the IRS. The penalty for 2015 has risen to 2% of taxable income above the threshold filing amount. So failure to have proper health insurance coverage could take away much of your refund.
Again, health insurance premiums are a deductible expense if you can itemize on your tax return. If you are self employed, you can take an above the line deduction and you don't have to itemize in order to get the deduction.
While health insurance is a necessary evil in our day, it does provide some tax benefits as well.
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