Tax savings for health care costs
Beginning in 2007, retired public safety officers, or those who have separated from service due to disability, get a tax break for health care costs. If you are a retired public safety officer,
such as a policeman, fireman, member of a rescue squad or ambulance crew, a member of a volunteer fire department, or a chaplain of a volunteer fire department, you may be eligible to exclude from income distributions from your governmental retirement plan that are used to pay health insurance premiums.
The exclusion is limited to the lesser of your actual health insurance premiums, or $3,000. The payment of the health insurance premiums must be made directly to the provider of the health insurance plan. The exclusion will not apply if the premiums are paid by you then reimbursed by the pension plan. This exclusion applies to distributions from governmental defined benefit plans or defined contribution plans, governmental 403(b) tax-sheltered annuity plans, and governmental 457(b) eligible deferred compensation plans.
Income Tax Preparation, Accounting and Payroll service by Don Brooks & Associates - Don Brooks Associates, Inc.
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Tax Tips Small Business
Automobile Expenses
Which is better - deducting the standard mileage rate or actual expenses?
With the increasing cost of gas, it might be a good idea to revisit which tax deduction is the most beneficial - claiming 50 cents per business mile (55.5 cents starting July 1, 2011) or your actual vehicle expenses. Claiming the standard mileage rate is easier. All you have to do is keep track of your business miles and multiply them by the current rate. In addition to the standard mileage rate, you may also deduct the costs for parking and tolls. Plus, if you are self-employed, you can deduct the interest paid on your car loan.
Read more...Small Business Quick Tip
| If you are a self-employed taxpayer, you may deduct 100 percent of your health insurance premiums from your income. The deduction for health insurance premiums does not reduce your self-employment tax, however. |
Saturday, 19th May 2012
Tax Tips Personal
Do You Have Debt Forgiveness?
You may not have to include it in income
When you are liable for a loan but can't repay it, some lenders will forgive the debt. What many borrowers don't realize is that this cancellation of debt results in taxable income in the year of forgiveness. The lender usually will issue a 1099-C to report the cancelled debt. If you receive one, don't ignore it. Be sure to give it to your tax preparer and discuss the circumstances surrounding the loan.
Read more...Personal Quick Tip
| You are permitted to make a one-time transfer from your IRA to your HSA from which you can pay future medical expenses. A "qualified HSA funding distribution" is a distribution from your IRA (other than a SEP or a SIMPLE IRA plan) to the extent that the distribution is contributed to your HSA in a direct trustee-to-trustee transfer. Once made, the election is irrevocable. |