(UPDATE: The giveaway is now closed. We have a winner! See the comments for more info.)
It’s Back To School Week on the blog!
My daughter got contact lenses this week. That means I’ve been spending a lot of time with her in the bathroom. A lot. There’s been a great deal of handwashing and squealing. But I think we’re getting closer to her being able to do it herself.
Or at least letting me do it without all of the flailing about.
She’s been begging for them for a bit since her glasses are tough to manage with her hockey mask. I balked initially. I had two concerns: infection and cost. It turns out that infection isn’t as much of a risk as when I was a kid (hers are disposable so you just toss them out every day) and the cost wasn’t bad at all since we have health insurance.
As small business owners, we pay our own health insurance. It is probably, after housing, the single most expensive cost of living expenses in our family. And we’re not alone. More and more families are shouldering the cost of health care as fewer companies offer benefits and still others re-characterize employees as independent contractors in an effort to avoid laws which might require them to pay benefits.
Fortunately, the cost of health insurance is deductible if you itemize your deductions on federal form 1040. You report health insurance payments as part of your medical expenses claimed on a Schedule A. You can deduct expenses you pay for medical and dental care for yourself, your spouse, and your dependents. The amount that you can deduct is the excess of those expenses over 10% of your adjusted gross income (taxpayers age 65 and older may continue to use the older 7.5% threshold through December 31, 2016).
But what if you don’t pay for your own health insurance? Well, clearly you don’t take the deduction. But you don’t pay tax on those benefits either: if you receive health care insurance as a perk of your employment, the value of those benefits is generally excluded from income. They are federal income tax-free to you.
The Affordable Care Act has changed the way that we pay for, deduct, and report health care benefits.
For one, under the Affordable Care Act, group health plans and health insurance issuers that provide dependent coverage of children must continue to make such coverage available for an adult child until age 26. That coverage will continue to be excluded from gross income. (Notice 2010-38 downloads as a pdf). You will, however, see your health care benefits reported on your form W-2 “for informational purposes only.” Again, this number does not affect your final tax bill.
Additionally, Section 162(l) has been amended to allow self-employed individuals to deduct amounts paid during the taxable year for insurance that constitutes medical care for the taxpayer, his or her spouse, and dependents under the age of 27.
For purposes of health care benefits, self-employed individuals generally include sole proprietors, partners in a partnership, members of an LLC treated as a partnership for tax purposes, and shareholders who hold at least 2% of the stock of an S corporation.
The treatment of health care coverage will probably continue to make news as the provisions of the health care act get hammered out. For now, however, the tax treatment stays largely the same: employer-provided health care benefits are federal income tax-free and the rest of us can take a deduction.
And that brings us to today’s giveaway! VSP Vision Care is offering each of three readers a free individual vision insurance plan for a year of coverage from VSP Direct®. VSP Direct is VSP Vision Care’s individual insurance product, offering high-quality vision benefits directly to consumers. VSP® Vision Care is the nation’s only not-for-profit vision care company.
Individual vision insurance from VSP Direct includes coverage for an eye exam with a low co-payment, allowance for glasses or contacts, fully covered lens options with 20-25 percent off any non-covered options, and access to the largest doctor network in the industry – all backed by a 100 percent satisfaction guarantee. VSP Direct offers the lowest out-of-pocket costs in the industry and a typical annual savings of $227 a year. A one-year plan is valued up to $218.95.
To enter to win, just post a comment below telling me the age you started wearing glasses or contacts. If you don’t wear either, just say that! I’ll go first to get you started: I got glasses in the 4th grade.
Entries must be posted in the comments section for this blog post in the space below by 10:00 a.m. EST on September 9, 2013. It’s just that easy. I’ll choose three winners randomly (using a number generator) out of all of the qualifying entries.
Be sure and read the fine print for more rules because, as you know, I’m a lawyer and I like rules:
- Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts.
- I love my Twitter followers and my Facebook fans but for this particular giveaway, tweets and Facebook comments will not be counted. Ditto for emails. You must leave your comment on the blog at this post.
- You can enter as many times as you like but you must leave a different answer each time you comment.
- Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest. Similarly, pingbacks and other links will be disregarded for purposes of the contest.
- You must include your full name and your email address with your entry, just enter it when you register to comment. I won’t publish your email address but I do need contact information for the winning entry.
- Due to shipping considerations, only United States addresses, please. Sorry, Canada, eh?
- I respect your privacy and I will not send you anything unrelated to your entry in this contest. By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
- Like Judge Judy, my determination is final.
- Prizes are provided directly by our sponsors. Sponsors do not pay for placement and do not receive any compensation for contributions – nor do I have any affiliation, paid or otherwise, with any of our sponsors.
- Finally, the giveaway is about me, me, me. It’s not affiliated with or endorsed by Forbes. So leave them out of it, okay?
Comment away! And thanks for participating in Back To School Week!
