Some good news for small businesses owners on Medicare Part B. The IRS is permitting for the 1st time self-employed people to deduct their Medicare Part B healthcare premiums.
What is Part B? Part B helps cover medically-necessary services like doctors’ services, outpatient care, durable medical equipment, home health services, and other medical services. Part B also covers some preventive services. The costs for Medicare part B have substantially risen form a modest $54 to a $99.90 minimum and now indexed for income.
Table 1: Part B Monthly Premium
Beneficiaries who file anindividual tax return with income
Beneficiaries who file a joint tax return with income
|Your 2012 Part B Monthly Premium Is|
If Your Yearly Income Is
$85,000 or less
$170,000 or less
Prior to the 2010 tax year, the IRS did not permit the deduction to seniors who paid Medicare Part B health insurance premiums, according to a Bloomberg report. Strangely the IRS did not release of this announcement but the deduction is on line 29 of the new 1040 tax form and applies to people who do not claim a tax deduction.
Anyone who is self-employed, regardless of age, may deduct the premiums paid for health insurance, under certain conditions such as insurance established under the business or in the name of the person who runs the business.
This posting is not necessarily tax advise and it is recommend to check with you accounting professional before filing 2011Tax returns.
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The IRS has announced the Health Savings Account (HSA) limits for 2012.
In 2012, HSA limits are as follows:
HDHP Minimum Annual Deductible (No change from calendar year 2011):
Single – $1200
Family – $2400
HDHP Out-of-Pocket Maximum:
Single – $6050
Family – $12,100
HSA Maximum Contribution Limit:
Single – $3100
Family – $6250
HSA/HDHP Market Growth
HSA holders own the assets in the accounts and can build up substantial sums over time. Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.
HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.
• Between January 2009 and January 2010, the fastest growing market for HSA/HDHP products was large-group coverage, which rose by 33 percent, followed by small-group coverage, which grew by 22 percent.
• 30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the remaining 20 percent were in the individual market.
• States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois and Minnesota
Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.
Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.
Tax Free Money allowed for non traditional Medical coverage– As per IRS Publication 502, unused moneys can be used for dental,vision, lasik eye surgery, acupuncture, yoga, infertility etc. Popular Examples
Portability – The funds belong to you, so you keep the funds if you change jobs or retire.
Our overall experience with HSAs have been positive when employer funding is at minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money). Traditional plans trend of higher copays and new in network deductibles has also led to the popularity of an HSA.
For more customized information and how to navigate this please contact us:
Millennium Medical Solutions Corp.
200 Business Park Drive
Armonk, NY 10504