Health Insurance premiums: before tax or after tax ??

[Zombie]

GF get's an option of having the premium deducted from her paycheck before taxes or after taxes. I told her to do before taxes cause that makes sense to me and that's how mine is done.

But wht's the difference weither you have it deducted before taxes or after taxes? I only see a small tax deduction at the end of the year and that too if her expenses reach that high.

 

[kranky]

Always before taxes. You will save the amount of Federal income tax + FICA that would have been applied to your premiums. Unless you pay zero tax, before-tax is always better.

 

[Zombie]

exactly what I had thought.

This premium is not something that can be used as tax deductions when you file for taxes or is it?

 

[EagleKeeper]

Originally posted by: Zombie
exactly what I had thought.

This premium is not something that can be used as tax deductions when you file for taxes or is it?

If you take it before taxes, then it is not deductible.

Note: that for most people this is a moot point.

Medical expenses must be greater than 7.5% or the gross income before they can even be considered to be deductible.

The total of all allowable medical expenses must be reduced by 7.5% of your Adjusted Gross Income

As an example: If you have an income of $30K, you need $2250 in medical expenses to even consider using them against the taxes. So the first $2250 in expenses will not count for anything.

 

[Zombie]

yep, tht's what I thought.