Health Insurance

[tpnl]

I was under the impression that if health insurance is deducted from your paycheck with pre-taxed dollars, then you could not deduct the portion the employee pays, because of using pre-taxed dollars. Example: you pay $100 per month for health insurance through your place of employment. That $100 per month does not show up in box one on your W-2.

Our office bought out another CPA this last tax season and she pointed out to me that I did not include the premiums the client paid for health insurance with pre-taxed dollars. This CPA told me the portion the employer pays is not deductible but the portion the taxpayer pays is. Does this sound right? I am trying to figure out if I need to amend this return.

I have looked in THE TAX BOOK and did not find an example of what an employee pays for health insurance premiums using pre-taxed dollars.

Thanks for any help, I'm second guessing myself, maybe things have changed?

[taxtime]

If it is

A pre conversion plan (premiums come out before taxes) there is no deduction on the Individuals return for the premiums.

[Jesse]

Agree with taxtime.

Does the amount of the premiums and other medical expenses actually exceed 7 1/2% of the adjusted gross income? I have one client that feels a need to see the amount they pay for medical insurance on that Schedule A. It may be wrong of me but to avoid conflict I enter the amount on line 1 even though it nets out to ZERO on line 4 of the Schedule A because total medical does not exceed the 7 1/2%.

I have a couple clients w/ employee expenses also. They know their coworkers are "writing off" union dues and a few other expenses, so as long as I have it on the Schedule A, even though it nets out to Zero, they are pacified.

[TaxLadyinPA]

I always do Sch A

The clients always have their mortgage payments, their RE taxes, and their medical expenses along with their contributions. I always take that extra 2-3 minutes and put them on the Sch A, print it out and then draw a big X on the page to show them that they cannot itemize. If I didn't do that then they would think that I wasn't doing my job and they would be missing out. That extra couple minutes of data entry I know adds up but if it keeps my client happy and glad they came to me then I do it.

The answer to your health insurance question is just as Taxtime states. If it is pretax then they basically have already gotten their deduction. Which actually I've never understood why that one came to be. Great for them ... but what about the ones that aren't pretax and they do itemize deductions except they lose out on the medical because of the 7.5%. Again ... I don't understand why they have such a high percentage on medical so that many are disqualified from taking the deduction.

But I know your responses to this .... "It's the Government .... what else do you expect" LOL

Changing the subject.... I had plenty clients this year that usually has some *CASH contributions* until this year there was a big fat 0 in the contributions line LOL

[Burke]

[QUOTE=tpnl;59640]Our office bought out another CPA this last tax season and she pointed out to me that I did not include the premiums the client paid for health insurance with pre-taxed dollars. This CPA told me the portion the employer pays is not deductible but the portion the taxpayer pays is. /QUOTE]

If that is what she thinks, perhaps you better check her returns verrrrry carefully for a while.

[sea-tax]

I agree more or less with the rest. Double dipping is not typically a good mod-us operandi when it comes to tax deductions.

But hey I like saving taxes just as much as the next guy/gal.