The IRS Deductions Blog

Archive for the ‘Individual Tax Deductions’ Category

In this article we shall try to provide some information on Medicare, especially on Medicare Supplement Plans. As it is known that the Medicare plans helps in paying the medical costs that you may need. According to the rules the Medicare policy coverage starts at the age of 65. Actually if you have purchased a Medicare policy then in normal state your Medicare coverage would start on the 1st day of the month you turn 65. Which means that if you reach the age of 65 on 20th of May your policy coverage would start on 1st of the same month. Though the Medicare policies pays for most of your medical bills, still there are some costs that are not paid by your Original Medicare policy as they are not the part of your policy coverage, though which are added in bill for the services that you receive. Therefore you need to pay for that extra money from your own pocket even if you are having an Original Medicare plan.

Therefore for that reason the Medicare Supplement plans are introduced so that you can meet those extra costs that are left aside by your Original Medicare plan. And for that reason these policies are also known as the Medigap plans. These are supplementary plans having close relationship with the Original Medicare plans. The Medicare Supplement Plans are totally administered and sold by the private insurance companies and there are 12 standard Medigap plans that are to be sold by them.

You can have an Original Medicare plan and along with that you can also have a Medicare Supplement Plan. And both of them would pay their share of coverage. Medigap policies are a kind of coinsurance, copayments, or deductibles. The 12 standard Medigap plans are categorized under the letter covers A through L. And each of them have their own set of benefits and no matter from which company you may buy the Medigap plan you are going to get the same benefits. But it is to be remembered that the Medigap policies don’t work with any other type of health insurance policies save the Original Medicare pan. No other plans like the Medicare Advantage plan, Veterans Administration benefits or TRICARE could work with Medicare Supplement Plans. Which means you can’t get enrolled for a Medicare Supplement Plan if you are having these plans already. If you are having Medicare Advantage plan you need to switch over to Original Medicare plan in order to get enrolled for Medicare Supplement Plan.

Almost all the Medicare Supplement Plans have the basic benefits of Medigap plan A and B and in addition to that they have some extra benefits of their own. Some of the Medicare Supplement Plans cover certain costs that are not covered by the Original Medicare. However it is always better to get enrolled for a Medicare Supplement Plan within thirty days of getting your Original Medicare policy. In this you can get some extra benefits in cost reduction in premium payable. Moreover, before you choose a Medigap policy for yourself go through the offer documents of all the Medigap plans from A through L so that you can get a better idea of which one to choose from them. Sometimes it is seen that some of the plans which costs a little bit more and apparently seems to have lesser benefits turn out to be one that can save you a lot of money in the form of yearly deductible. Therefore be careful while choosing your Medicare Supplement Plans.

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Individual Health Insurance Market Data: Half of Individual Policyholders Paid $134 or Less per Month; Half of Family …

MOUNTAIN VIEW, CA–(Marketwire – March 31, 2010) – eHealth, Inc. ( NASDAQ : EHTH ), parent company of eHealthInsurance ( http://www.ehealthinsurance.com ), today released updated data on the cost of individually-purchased health insurance policies for individuals and families. The findings appear in The Cost of Individual and Family Health Insurance Plans 2010 Update …

Seven Biggest Mistakes People Make With Health Insurance – Part Two Co-Insurance

It is common to think of a 1031 transaction as one involving land for land or buildings for buildings. However, this is a tragic oversimplification.1031 transactions deal with “like-kind” property and in most people’s minds “like-kind” means both pieces of property are alike, such as trading land for land. But do not follow this train of thought when dealing with real estate; in the eyes of the IRS “like-kind” refers to all “qualified real estate”, opening the doors to a wide array of transactions.

For example:

In one case a person wished to exchange18 oil wells valued at 1.375 million for an apartment or office building. If they were to simply sell the oil wells and buy their building of choice, they would face a substantial capital gains tax; however, through the use of a 1031 they are now making this exchange tax free. That is because oil wells are considered qualified real estate and are eligible for a 1031 involving all other qualified real estate. Other qualified real estate types include: Coal mines, mineral rights, timber, and vineyards.

This all means that investors have an immense selection of properties to both acquire and exchange using a 1031.

Note: The example above pertains to real estate. A 1031 can also be used for property other than real estate such as medical equipment or airplanes, in which case the property would have to be alike i.e.: airplanes for airplanes, medical equipment for medical equipment.

ES Group is a Qualified Intermediary pursuant to Internal Revenue Code §1031. ES Group corresponds with each client’s attorney and/or tax advisor and forwards legal documentation, as requested, so that the Internal Revenue Code §1031 rules and regulations are thoroughly understood. ES Group prepares the necessary documentation- Exchange Agreements, Assignment Agreements, Notice of Assignments, and oversees each closing to assist in proper §1031 procedures. ES Group provides guidance, information and critical timelines throughout the entire exchange.

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Is It Deductible? 12 Common Expenses

To get you headed in the right direction, here are 12 assorted expenses that might be confusing for many taxpayer.

Question: Home Insurance, should I go for high deductible?

For home insurance, i am getting quotes from couple of companies. My question is should I go for higher deductible and lower premium or the other way. Most of the other coverage is same.

Answer: The answer to this depends on your financial condition and how much you are willing to absorb yourself in the event of a loss. As a practical matter, I always recommend high deductibles on all forms of insurance. It reduces the cost of your insurance and decreases the chance that the insurance company will tire of your frequent claims and significantly increase your premiums. Covering the smaller claims yourself also allows you to get repairs done even quicker without having to have an appointment with an adjuster.

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To amend part B of title XVIII of the Social Sec. Act to provide for a prescription drug benefit with a high deductible at no add. premium and access … certain low-income Medicare beneficiaries. $10.30 The BiblioGov Project is an effort to expand awareness of the public documents and records of the U.S. Government via print publications. In broadening the public understanding of government and its work, an enlightened democracy can grow and prosper. Ranging from historic Congressional Bills to the most recent Budget of the United States Government, the BiblioGov Project spans a wealth of gover…

Power to the patient: can high-deductible plans and health savings accounts lower premium costs and replace the traditional goal of comprehensive insurance?: An article from: State Legislatures $9.95 This digital document is an article from State Legislatures, published by Thomson Gale on May 1, 2006. The length of the article is 1141 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Power to the…

To amend the Internal Revenue Code of 1986 to provide tax incentives for the payment of premiums for high deductible health plans, and for other purposes. $10.16 The BiblioGov Project is an effort to expand awareness of the public documents and records of the U.S. Government via print publications. In broadening the public understanding of government and its work, an enlightened democracy can grow and prosper. Ranging from historic Congressional Bills to the most recent Budget of the United States Government, the BiblioGov Project spans a wealth of gover…

Seniors worry about Advantage

MIAMI | Insurers constantly caution seniors that their Medicare Advantage perks such as hearing aids, dental payments and even gym memberships will fizzle if Democrats get their way and cut government subsidies for them. But tens of billions of Medicare dollars funneled through insurers also pay for extras that never reach beneficiaries: multimillion-dollar salaries; executive retreats in Hawaii …

Rep. Petri’s Health Care Amendment

Question: Deduct education expense as startup business deduction over 5 years?

My wife started going to a school to become a personal trainer (this was a new trade for her, and the school is not eligible for Federal Aid – so we can’t deduct on our personal income taxes). The school is not mandatory for new trainers, but provides better skills and hands-on training (she could have studied from a book and tried to pass the accreditation exam without school). If she starts a business as an independent personal trainer, can she deduct the cost of tuition as a startup business deduction & amortize it over 5 years? If so, what are the main requirements for ensuring this is eligible?

Answer: They won’t be deductible.

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Teacher’s Pocket Tax Guide The Teacher’s Pocket Tax Guide helps teachers with line-by-line instructions, examples, and information on the U.S. income tax rules that apply to them….

Minnesota’s public school fee law and education tax credit and deduction (House Research information brief) …

Are special school expenses a medical deduction?: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on August 1, 2003. The length of the article is 956 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle…

Swine flu puts Seaside man in hospital for 65 days

John Chapman, 44, of KCZB FM radio, developed pneumonia that resulted in more than two months of treatment for everything from blood clots to a collapsed lung to kidney failure.

Rich Dad The Perfect Business by Robert Kiyosaki

Question: Deductions, deductions, and plenty of confusion!?

1) I bought a new car in 06 for personal use. Four months later (still in 06) I was involved in a wreck (not at fault).
Can I deduct…
A) The sales tax and other miscellaneous taxes on my car when I purchased it? (Conflicting info..one person says yes, another says no because it isn’t for business only)
B) Out-of-pocket expenses for rental fees? Or taxes only?
C) Standard depreciation?
D) Extra depreciation due to the wreck?
E) Deductible paid to body shop but not re-imbursement from insurance company not received by the end of 06.

2) Student loans. I was not a student in 2006, but was making payments on my student loans.
Can I claim..
A) Interest paid on student loans?
B) Interest paid but not claimed from previous tax years? How do I claim this if I can?
C) Hope credit or Lifetime Learning Credit?

Answer: Sales tax on your car purchase – if you itemize, you can choose whether to deduct sales tax, or state and local taxes. If you deduct sales tax, there’s a table for your state of allowable amounts if you don’t save and add up all your receipts. You can add sales tax paid on your car to the table amount. If you don’t itemize, you can’t take a deduction for this.

Out of pocket expenses for rental fees, no. Taxes on that, only if you are deducting sales tax (see paragraph above) and you saved all your receipts from the year and add them up – if you take the amount in the table, plus the tax on your car purchase of course, then no, you can’t take the tax on the car rental.

Standard depreciation would only apply if you had bought the car for use in your business, Since you said it’s for personal use, then no, you can’t take a deduction for depreciation, either standard or extra for the wreck.

Non-reimbursed deductible – yes, if you itemize, you can claim that as a casualty loss, subject to certain limitations, if you don’t know whether you’ll get reimbursed or not. If you claim it and do get reimbursed though, the reimbursement will be taxable income, so if you’re pretty sure you’re going to get reimbursed, probably not worth doing.

Student loan interest from the current year – yes, can be claimed as an adjustment even if you don’t itemize. From previous years but not claimed – no, you can’t take it this year, but you can amend the previous years.

You aren’t eligible for Hope or Lifetime Learning credits except in years when you pay tuition and fees to an eligible institution for eligible education.

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Tax Credit Incentive About To Expire

Only a few days remain for consumers to cash in on a federal program designed to put money back in their pocket.  The federal car sales and excise cash reduction program will come to an end this Thursday.

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