![]() It usually lasts three to six months, although some policies are shorter or longer. Short-term health insurance: Short-term health insurance is a type of health insurance designed to be temporary. COBRA premiums can be tax-deductible, provided you itemize deductions on your federal income tax return. But with COBRA insurance, you can continue your coverage for up to 18 months as long as you pay the premiums yourself. ![]() Ordinarily, when you lose your job, your health insurance coverage also ends. COBRA allows people to continue their health insurance coverage after they lose their job. Since you don’t have to pay taxes on that money, you can’t deduct the premiums on your tax return.ĬOBRA: COBRA insurance is a type of health insurance created by the Consolidated Omnibus Budget Reconciliation Act of 1985. Įmployer-sponsored plans: As mentioned above, when you have health insurance through your job, any portion of the premiums you pay should be taken out of your paycheck before your employer calculates income and payroll taxes. For example, if you receive a subsidy that pays for 60% of your health insurance premium, you can only deduct 40% of your premiums on your tax return. ![]() Whether you can deduct those premiums depends on whether you get a subsidy and how much it covers. The marketplace also offers subsidies to help people pay their premiums if they qualify. You can use the marketplace to compare different health insurance plans and find one that fits your needs and budget. The Affordable Care Act ( ACA) created the marketplace. that allows people to shop for health insurance plans. You may get health insurance from a variety of sources, so let’s look at the deductibility of different kinds of insurance plans.ĪCA marketplace plans: The health insurance marketplace is an online system in the U.S. Which health insurance plans may be tax-deductible?
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