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Medicare Premiums may Lead to Tax Savings
If you pay premiums for Medicare health insurance, you may be able to combine them with other qualifying expenses and claim them as an itemized deduction for medical expenses on your tax return. This includes amounts for “Medigap” insurance and Medicare Advantage plans, which cover some costs that Medicare Parts A and B don’t cover.
Generally, you can deduct medical expenses only if you itemize deductions and only to the extent that total qualifying health care expenses exceeded 7.5% of your adjusted gross income. But, if you’re self-employed people or a shareholder-employees of an S corporation, you can generally claim an above-the-line deduction for your health insurance premiums, including Medicare premiums. That means it’s not necessary for you to itemize deductions to get the tax savings.
Contact the office with questions about claiming medical expense deductions on your personal tax return. Also, be sure to ask for help identifying an optimal overall tax-planning strategy based on your personal circumstances.
Don’t Wait Until the Last Minute to File Your Extended Return!
If you requested an extension to file your 2023 tax return, you probably know that the extended deadline is coming up soon, on Oct. 15. If you have the information you need, consider filing now.
There’s no advantage to waiting, and last-minute filing may lead to worry. If you’re concerned about paying any tax owed, the IRS offers short- and long-term payment plans, as well as installment agreements, to taxpayers who qualify. It’s important to act quickly if you owe because any amount that was due April 15 accrues interest until the balance is paid. As soon as possible, gather your 2023 tax year records and contact the office for a tax preparation appointment or to ask questions you may have.
An Employee Benefit with Possible Magnetic Power
Employers seeking to attract new recruits and retain talent should consider offering educational assistance programs to their employees. The plans aren’t new, but they temporarily offer greater flexibility in how they work.
Through Dec. 31, 2025, the funds can be used to help employees pay their federal student loan debts. According to the U.S. Dept. of Education, the average borrower in 2024 has federal student loan debt of $37,850. Student loan payments can be made directly to employees or lenders. These tax-free benefits are limited to $5,250 per employee, per year. Benefits that exceed that amount are taxable as wages.
If your company doesn’t offer an educational assistance program, it might be a good idea to consider establishing one while this additional feature is still in force. In today’s tight labor market, fringe benefits like this one may be a magnet that gives your company an advantage. To learn more about adding this program to your benefit package: https://www.irs.gov/newsroom/employer-offered-educational-assistance-programs-can-help-pay-for-college
