You can deduct it, but there are a couple of distinct minimums in the tax code for how much you have to spend before it starts reducing your taxable income. (
https://www.insurance.com/health-insurance/health-insurance-... )
Also, for simplicity, I left out payroll taxes, which are invisibly paid by your employer directly to the government ( https://squareup.com/us/en/townsquare/payroll-taxes-defined ).
So the choice from earlier is actually more correctly stated as:
- Your employer directly pays $220/mo for your insurance, or
- Your employer pays you $200/mo as cash and pays $20/mo directly to the government in payroll taxes, totaling $220/mo. Then the government takes $40 (adjust as appropriate for tax bracket) out of your paycheck as income taxes, and you have $160/mo left over to pay for health insurance.
The payroll tax issue would apply even if you could fully deduct the $200/mo from your personal taxable income.
> seems easy to fix. Why isn't that part of the health care discussion?
I am as mystified as you are.
Also, for simplicity, I left out payroll taxes, which are invisibly paid by your employer directly to the government ( https://squareup.com/us/en/townsquare/payroll-taxes-defined ).
So the choice from earlier is actually more correctly stated as:
- Your employer directly pays $220/mo for your insurance, or
- Your employer pays you $200/mo as cash and pays $20/mo directly to the government in payroll taxes, totaling $220/mo. Then the government takes $40 (adjust as appropriate for tax bracket) out of your paycheck as income taxes, and you have $160/mo left over to pay for health insurance.
The payroll tax issue would apply even if you could fully deduct the $200/mo from your personal taxable income.
> seems easy to fix. Why isn't that part of the health care discussion?
I am as mystified as you are.