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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2664
Experience:  IRS licensed Enrolled Agent and tax instructor
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Married, filing jointly. We have one 5 year old daughter.

Customer Question

Hello. Married, filing jointly. We have one 5 year old daughter. Combined household net income is going to be around 142000 in 2016 - all through salary. No other income sources. We are short selling our home this year and will be renting instead of being homeowners next year. We will be contributing to a 401k through my employer for the first time starting in 2016. Hoping to contribute the max. It will not be company matched. I'm trying to figure out what to do with health insurance to help decrease income tax liability as much as possible. My employer offers pretty terrible plans. The coverage and deductibles are not attractive for the premiums offered. I can get better plans with lower deductibles for the same premiums through a Nevada marketplace offering. Obviously, benefits through my employer are pre-tax though. So my question is ... for tax purposes, should I stick with my bad employer offered plan? Or is it possible to deduct premiums paid from my taxes? And would an HSA help with any of this for tax purposes?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

Yes, medical premiums are deductible with other medical expenses but the "over 10% of your AGI" limitation and without mortgage interest and property taxes deduction you will most likely not be able to itemize your deductions anyway. Your best option is HSA. Unlike medical expenses restricted deduction, you can reduce your AGI by HSA contributions and the expenses paid using HSA funds will not be deductible (which you would not be able to utilize anyway).

Expert:  emc011075 replied 1 year ago.

I would suggest to stick with the employer's plan and maximize your HSA deductions.

Expert:  emc011075 replied 1 year ago.

Unless you generate some of the income through small business or partnership/scorp/corporation, it is very difficult to deduct medical premiums you pay yourself. Statistically, very little percentage of taxpayers can actually deduct medical expenses on their itemized deductions.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

Expert:  emc011075 replied 1 year ago.

I see you read my respond but haven't got any feedback.

If this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.