Sending out an S.O.S., as a last resort...

[momofthree]

Good catch Momofthree - I hadnt factored that in.

Wantmypeace - I dont know if this will apply to you or not, but for others that may not be aware, there is a clause that states if you are in an employee sponsored plan (as in you pay a portion and your employer pays a portion) and benefits are taken out pre-tax you cannot deduct them. It has to be post tax.

If it's pre-tax, then it won't show on the W2 at tax time, so it'd still be un-taxable either way it's done. It'd actually be a BETTER deduction if it's pre-tax because then it's not subject to being over 7.5% of the income. ;)

[debee]

Pandora - never mind. I think you must be referring to the cafeteria plan. I thought you were talking about pretax health insurance like ours in which the employer pays a portion of the insurance and we pay a portion. That scared me! That can't be what you meant or I'm sure I would have heard of it before now.

[Wantmypeace]

I'm still confused. I'm talking about being able to claim the health insurance on my means test. If the monthly premium amount (of something VERY close to it) is taken out of my check pre-tax each month (on the stub, it is listed in the box for FSA, FSA129, Cafeteria 125), and then we write a check for the premium and get a reimbursement from the FSA each month OR the payroll gal just pays the premium directly out of the FSA (not sure which was they're going to do it), can I claim the health insurance on my means test. We are, after all, paying the health insurance completely out of our pay. We just aren't paying taxes on the money we're paying it with.

[momofthree]

Yes, it still counts on the means test...

[Wantmypeace]

So, what is it that everyone else is talking about? IRS tax deductions on tax returns? Or maybe the Ch.13 allowances?

[debee]

You can't count FSA deductions from income as expenses on your means test or in schedule j. You can't reduce your income by the amount of an FSA deduction. You can only count the actual medical expenses you incur.

A person could elect to put $1500 per month into their FSA. Their actual medical expenses might only be $200 per month. They can only claim the expenses they actually incur.

We don't have a cafeteria plan so I don't know anything about how they work, but we do have an FSA and I don't reference it in any schedule or the means test. I only reference our actual medical expenses. So if you can provide receipts for the health insurance amount paid out of your FSA, copays, rx, etc - all that should be fine.

It all goes on line 31 of the means test.

[Wantmypeace]

Got it. We would just reference the amount that is actually paid TO the insurance company for the premiums. It will be the same as the FSA amount, so it's good either way. I was worried it wasn't allowed at all because it was pre-tax, which didn't make any sense to me, but little in this process does!

[Pandora]

http://www.irs.gov/publications/p502/ar02.html

Entire section on what is and what is not allowed for deduction re: medical / health care.

ETA: Example from IRS

Employer-Sponsored Health Insurance Plan

Do not include in your medical and dental expenses any insurance premiums paid by an employer-sponsored health insurance plan unless the premiums are included in box 1 of your Form W-2, Wage and Tax Statement. Also, do not include any other medical and dental expenses paid by the plan unless the amount paid is included in box 1 of your Form W-2.

Example.

You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you cannot deduct the premiums paid with that money.

For FSA's, HSA's, and MSA's

http://www.irs.gov/publications/p969/index.html

Flexible Spending Account

You cannot include in medical expenses amounts for which you are fully reimbursed by your flexible spending account if you contribute a part of your income on a pre-tax basis to pay for the qualified benefit.

Health Savings Accounts

You cannot include in medical expenses any payment or distribution for medical expenses out of a health savings account. Contributions to health savings accounts are deducted separately. See Publication 969.

How Do You Figure Your Deduction?

To figure your medical and dental expense deduction, complete lines 1 through 4 of Schedule A, Form 1040, as follows:

Line 1. Enter the amount you paid for medical expenses after reducing the amount by payments you received from insurance and other sources.

Line 2. Enter your AGI from Form 1040, line 38.

Line 3. Multiply the amount on line 2 (AGI) by 7.5% (.075) and enter the result.

Line 4. If line 3 is more than line 1, enter -0-. Otherwise, subtract the amount on line 3 from the amount on line 1. This is your deduction for medical and dental expenses.

[momofthree]

So, what is it that everyone else is talking about? IRS tax deductions on tax returns? Or maybe the Ch.13 allowances?

Yes, to help you figure out how much you should be taking out each month for taxes...

[Pandora]

yes you can still include it as the others have stated, but there are guidelines to DEDUCTING it regarding IRS.