Are Health Insurance Premiums Tax-Deductible?

Are Health Insurance Premiums Tax-Deductible?

Self-Employed Milford, NH Resident Has Questions

Self-employed individuals are able to deduct all premiums paid for health insurance.  This deduction is not available if the individual is eligible to participate in an employer’s health care plan but chooses to decline.  If you qualify for coverage under a spouse’s healthcare plan but decline this also, the tax deduction is ineligible.  Keep in mind that self-employed individuals are not able to deduct more than their generated income in a single calendar year.

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How Will Working from Home Affect My Taxes?

Can a Home Office Be Considered a Business Expense

Windham, NH Resident Seeks Advice

Employees working from home are no longer able to deduct business expenses, as this deduction was eliminated in 2018.  Only self-employed individuals can qualify for home office deductions.  Self-employed workers can claim either $5 per square foot of home office space up to 300 square feet, or a percentage of the home and costs to maintain it as a deduction.

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best-ways-to-protect-your-inheritance-from-taxes

Nashua, NH Resident Needs Help

If the property and other inheritance is below a certain dollar threshold, this will not be taxed.  The estate tax can be up to 40% of the value of the inheritance, depending on how much the inheritance totals.  In the United States this threshold is just over $11.5 million.  One way to avoid having your loved ones pay exorbitant taxes on their inheritance is by giving away your assets prior to your death.  $15,000 can be gifted each year to an individual without paying tax.

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What Are the CARES Tax Breaks for Businesses?

CARES Tax Breaks for Businesses

Amherst, NH Business Owner Seeks Advice

There are several tax breaks for businesses under the CARES (Coronavirus Aid, Relief and Economic Security) Act.  Charitable contributions are adjusted from a maximum 10% of the company’s taxable income, to 25% of cash donations.  Payment on the employer share of Social Security tax on payroll can be deferred until the end of the year and a tax credit is available of up to $5,000 per employee.  The cap on a business loss has also been suspended.

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How Will I Be Taxed in Retirement?

Taxes in Retirement

A traditional IRA and a 401(k) are tax-deferred retirement accounts.  The money is left in these types of accounts to grow and collect dividends.  However, when you start taking withdrawals you will pay taxes.  Roth IRAs differ in that contributions are not tax-deductible, but when you begin taking withdrawals this will be tax-free.  A portion of your social security benefits may be taxed if your provisional income exceeds $25,000.

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How are Lottery Winnings Taxed?

How are Lottery Winnings Taxed

Lucky Nashua, NH Resident Seeks Advice

Lottery, and other winnings throughout the year, that are $600 or more are taxed by the IRS.  If the money is received as a lump sum, you will pay the full tax amount.  If it is drawn out over several years, you will be taxed by what you receive for each calendar year.  The federal tax on winnings is 24% when and the local government will also take their own portion for taxes.  You can expect to pay between 30-35% of taxes on your winnings.

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Difference Between Earned Income and Adjusted Gross Income

Brookline, NH Resident Has Questions

Earned income refers to all of the ways that you get paid throughout the year.  This includes your paycheck, commissions, bonuses and income less expenses for self-employed individuals.  It also includes money earned from investments, interest, dividends, alimony and Social Security.  Adjusted gross income refers to this money less any standard deductions that are available to you.  These deductions, referred to as ‘above the line deductions’, are those that are standard to everyone regardless of whether they are itemizing.

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Are Child Care Expenses Tax-Deductible?

Are Child Care Expenses Tax-Deductible

If your annual income is $15,000 or higher, you can take advantage of the childcare expenses tax credit.  This tax break allows you to deduct up to $3,000 in childcare expenses.  This can include daycare, babysitter fees and even summer camp.  For two or more dependents this deduction totals $6,000.

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405 Daniel Webster Hwy
Merrimack, NH 03054
(603) 429-2009

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Tuesday: 9AM-5PM
Wednesday: 9AM-5PM
Thursday: 9AM-5PM
Friday: 9AM-4PM
Saturday: 9AM-2PM