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PREPAID MEDICAL INSURANCE

Forum|Forum|6 years ago
May 11, 2020
11 replies
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CLIENT TOLD ME HE HAD $500.00 DEDUCTED WEEKLY FROM NET PAY FOR MEDICAL

INSURANCE. HE PAID $25,000 LAST YEAR. HE SAID H & R BLOCK TOLD HIM IT WAS PRE TAXED AND THEREFORE NOT DEDUCTIBLE. IT SHOWS ON HIS PAYCHECK STUB AS AN ADJUSTMENT TO NET INCOME. HOW CAN IT BE PRE-TAXED IF IT IS DEDUCTED FROM NET INCOME. I;M CONFUSED?

I PLAN ON DEDUCTING IT AS A MEDICAL EXPENSE?

ProSeries Basic

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Best answer by abctax55

1) Please use your inside voice.

2) Do the "math" on the paystub to determine if it is a PRETAX or after tax deduction.

3) The Blockheads have been know to make mistakes.

4) Client *said* isn't a defensible position on a tax return that you sign. You might have to actually talk to the employer. I've had some very intelligent clients that were clueless on the before/after tax deduction issue.

5) If # 3 is correct, amend the prior year returns.

abctax55Answer

Level 15

1) Please use your inside voice.

2) Do the "math" on the paystub to determine if it is a PRETAX or after tax deduction.

3) The Blockheads have been know to make mistakes.

4) Client *said* isn't a defensible position on a tax return that you sign. You might have to actually talk to the employer. I've had some very intelligent clients that were clueless on the before/after tax deduction issue.

5) If # 3 is correct, amend the prior year returns.

HumanKind... Be Both

6

699574Author

Level 2

I agree with itonewbie. checkstub showed health insurance deduction from net pay, therefore

how can it be a pretax item? You folks are the best. Thank You.

itonewbie

Level 15

If you have already reviewed his payslips and comp breakdown for the W-2 and are sure it's deducted from Net Pay, why should that be a pre-tax deduction? You have already answered your own question.

This is some very costly insurance for an employer plan at $25k per year! I'd ask a few more questions to satisfy my curiosity and have that documented in case some agent is equally curious before deducting that.

---------------------------------------------------------------------------------Still an AllStar

abctax55

Level 15

I agree with Jensen... something just doesn't completely add up here.

Also, is there something on the W-2 coded DD?

Is this a family plan, and your client is paying for his/her dependents?

NMI.

HumanKind... Be Both

T

TaxGuyBill

It is rude and difficult to read when you type in all capital letters. All of your prior questions have done this. If you continue to do so, most likely nobody will respond to your future questions.

6

699574Author

Level 2

I'm really sorry i'm glad you me. It won"t happen again. My eyesight leaves a lot to be

desired and it just makes it easier for me. I never thought of the person reading my email.

You learn something new everyday,

T

TaxGuyBill

No problem. Thanks for responding!

Did your original question get answered to your satisfaction? As was mentioned, do the actual math to see what was done.

It is extremely unusual for the insurance to be NOT pre-tax, so that is likely why H&R Block assumed it was pre-tax. If it truly is not pre-tax, that is also costing the employer more money. If you are looking for another business client, you may want to contact that employer to save them some money. 😀

qbteachmt

Level 15

For this part: "I PLAN ON DEDUCTING IT AS A MEDICAL EXPENSE?"

Paying Medical Insurance premiums is not the same as incurring Medical Expense. You need to find out exactly what is being paid for.

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