How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lev Your Own Question

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22990
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

I am taking a leave without pay. So I will have a shortfall

Resolved Question:

I am taking a leave without pay. So I will have a shortfall in this year's contribution to several account: HSA (health savings account), 457 (b) (deferred compensation). There contributions are usually deducted pre-tax from my paycheck. Can I make up the shortfall by contributing to these account using my after tax money and later deduct it from my tax return? I also paid health insurance premium out of my pocket. The premium was usually deducted pre-tax from my paycheck. Can I deduct the premium payment from my income?
Thanks.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

LEV :

Hi and welcome to Just Answer!
You may contribute into HSA and deduct such contributions if otherwise you are eligible.
You may contribute into IRA account and deduct such contributions.
However you will not be able to deduct your contribution into 457b plan. If your plan allows direct contributions by employees - these contributions may not be deducted, but will be your cost basis in the plan - means - when eventually you will distribute funds - your after-tax contributions will be distributed tax free.

LEV :

In order to be eligible for a health saving account (HSA) you should be covered by the high deductible health plan (HDHP).
See IRS publication 969 - www.irs.gov/pub/irs-pdf/p969.pdf
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
-You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
-You have no other health coverage except what is permitted under Other health coverage.
-You are not enrolled in Medicare.
-You cannot be claimed as a dependent on someone else's 2011 tax return
.

Customer:

I also paid health insurance premium out of my pocket. The premium was usually deducted pre-tax from my paycheck. Can I deduct my premium payment from my income? Thanks.

LEV :

If you are covered by a regular health insurance at your job - unfortunately - the only option to deduct medical expenses - as itemized deduction on schedule A.

Customer:

That will require medical expenses greater than 7.5% of my income, right?


 

LEV :

Yes - that is correct. The other option - to pay out of your HSA account using pre-tax funds - but only if you are eligible.

Customer:

So I can pay my insurance premium from my HSA account?


 

LEV :

Yes - health insurance payments are classified as medical expenses and may be paid out of HSA.

Customer:

If I end contract with my current employer (state), can I distribute 457b without penalty?


 

LEV :

There is no penalty if you are above 59 1/2 or disabled.
There are some other exceptions - otherwise the distribution is subject of 10% early distribution penalty.

LEV :

- withdrawals permitted after severance from employment
- must start receiving distributions by April 1 following the later of year of retirement or attainment of age 70 1/2
However - there is no IRS 10% premature distribution penalty tax on withdrawals from 457b nlan. The penalty would only apply (if you roll over non-457 money into the 457b Plan - that money is subject to the penalty. Sorry for confusion.

LEV :

Under a 457(b) plan, you also might be eligible for a hardship distribution (that can only occur when the participant is faced with an unforeseeable emergency). You do not need to end your contract to be eligible.

LEV :

An unforeseeable emergency is a severe financial hardship resulting from an illness or accident, loss of property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant or beneficiary. Examples of events that may be considered unforeseeable emergencies include imminent foreclosure on, or eviction from, the employee's home, medical expenses, and funeral expenses. Generally, the purchase of a home and the payment of college tuition are not unforeseeable emergencies.

Customer:

One last question, can I use Flexible Spending Account or HSA account to pay for post-tax dental plan premium?


 

Expert:  emc011075 replied 2 years ago.
Yes, you can use Flexible Spending Account or HSA account to pay for dental plan premium. It is a legitimate expense. Use Flexible Spending Account first, if you don't use the money you will loose them at the end of the year. HSA funds can be carried over to the next year. Everything paid with pre-tax money cannot be deducted, including employer sponsored health insurance premiums. Usually if you don't pay it with cash, check or credit card, you cannot deduct it.
Expert:  Lev replied 2 years ago.
Health FSAs (flexible spending arrangements) are employer-established benefit plans - these may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. Employees may not establish such plans with external organizations.
Thus - if your employer doesn't offer FSA or if you do not work - that option is not for you.

While you may NOT open FSA account through an external organization, still you MAY open HSA through an external organization.
To be eligible for HSA - either via your employer or at the external organization - you should be covered by the high deductible health plan (HDHP) - as outlined above.
If you are covered by a regular health insurance at your job - the only option to deduct ADDITIONAL medical and dental expenses - as itemized deduction on schedule A - www.irs.gov/pub/irs-pdf/f1040sa.pdf - line 1.

All qualified medical expenses may be reimbursed from FSA or HSA.
For a list of qualified medical expenses - see IRS publication 502 - www.irs.gov/pub/irs-pdf/p502.pdf
As you see dental expenses are included.
Let me know if you need any help.
Be sure to ask if any clarification needed.
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22990
Experience: Taxes, Immigration, Labor Relations
Lev and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Lev
Lev
Tax Professional
22990 Satisfied Customers
Taxes, Immigration, Labor Relations