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Welcome to the Healthcare module, where we unravel the complexities of healthcare-related tax considerations. Navigating the intersection of taxes and healthcare can be intricate, but with the right knowledge, you can make informed decisions that positively impact your financial well-being. In this module, we'll explore various aspects, from the Affordable Care Act (ACA) requirements to Health Savings Accounts (HSAs), ensuring you understand the tax implications of your healthcare choices.
Your health insurance premiums may be tax-deductible. However, this generally applies if you itemize deductions, and the total medical expenses exceed a certain percentage of your adjusted gross income (AGI).
Key Tax Form: Look for information on Form 1095-A, 1095-B, or 1095-C provided by your insurance provider.
INSTRUCTIONS <https://www.irs.gov/pub/irs-pdf/i1095a.pdf, https://www.irs.gov/pub/irs-pdf/i109495b.pdf, https://www.irs.gov/pub/irs-pdf/i109495c.pdf>
Explore the tax advantages of contributing to FSAs and HSAs. Contributions to these accounts are often tax-deductible, and withdrawals for qualified medical expenses are tax-free. Make sure that there are contribution limits and eligible expenses.
Key Tax Form: Contributions to HSAs are reported on Form 8889.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/i8889.pdf
Some medical expenses, such as doctor visits, prescription medications, and certain preventive care costs can be deductible. However, you can deduct only the amount of your medical and dental expenses that is more than 7.5 percent of your adjusted gross income shown on Form 1040, line 38.
Key Tax Form: Medical expenses are typically reported on Schedule A of Form 1040.
INSTRUCTIONS https://www.irs.gov/pub/irs-utl/oc_october_medical_expenses_for_pwd_v7.pdf
If you purchased health insurance through the Marketplace, you might qualify for premium tax credits. There are some the eligibility requirements and rules on how these subsidies can make healthcare more affordable.
Key Tax Form: Form 1095-A provides details about your Marketplace insurance and is essential for claiming subsidies.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/i1095a.pdf
There are exemptions from the requirement to have health coverage under the ACA. You can learn how to claim these exemptions and what documentation is needed.
Key Tax Form: Form 8965 is used to report exemptions from the individual mandate.
INSTRUCTIONS https://www.irs.gov/pub/irs-prior/i8965--2018.pdf