Author Topic: Optimizing Health Care choices  (Read 575 times)

mavendrill

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Optimizing Health Care choices
« on: May 31, 2018, 10:25:16 PM »
Hi,
I am going to be in an interesting tax situation this year (and more or less the same next).
I am married, and have 2 kids and approximately 55000 pretax income total.  I just took a new job which will pay us a flat sum of 7200 for health care costs instead of providing health coverage.  I am wondering about the optimal way of handling our healthcare for tax purposes.  I am currently assuming that after adjustments both kids will qualify for medicaid (52200 is cutoff).  I would love to figure out a way to get both my wife and my insurance pretax, but am not sure what kind of options there are.

We are budgeting 5k for premiums, though this year it will less for an exchange plan.  We also have spent a reasonable amount on health care this year (~2k), though not sure how that might impact it.

MDM

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Re: Optimizing Health Care choices
« Reply #1 on: May 31, 2018, 11:05:51 PM »
Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan and the 'HDHP Analysis' tab of the case study spreadsheet.

terran

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Re: Optimizing Health Care choices
« Reply #2 on: June 01, 2018, 05:37:37 AM »
I think the only ways to not pay tax on premiums for insurance that isn't employer provided is to be self employed or to itemize and have medical expenses over 7.5% of AGI this year and 10% of AGI next year and beyond. The second option of course means you'd have to have other itemized deductions that add up to more than the standard deduction which is probably unlikely given how high the standard deduction is now.

mavendrill

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Re: Optimizing Health Care choices
« Reply #3 on: June 01, 2018, 07:49:23 AM »
A follow-up question on self employment.  Both my wife and I have side gigs that are self employed.  Both of these are fairly small money, but it is probably several thousand combined.  Are there limits that require certain profitability to make self employment healthcare a possibility

terran

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Re: Optimizing Health Care choices
« Reply #4 on: June 01, 2018, 11:49:11 AM »
This might help: https://turbotax.intuit.com/tax-tips/home-ownership/deducting-health-insurance-premiums-if-youre-self-employed/L6bRhLaVE

Looks like the two issues you might run into are 1)  you can't deduct more than your net self employment income and 2) you can't be eligible to participate in an employer subsidized health plan (not sure if they payment you'll be getting from your employer might be consider an employer subsidy for health insurance -- that's what it is, but if it just shows up as normal income, I'm not sure it matters what your employer says you should spend it on).

mavendrill

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Re: Optimizing Health Care choices
« Reply #5 on: June 01, 2018, 06:56:54 PM »
This was perfect.  Thanks for the help