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Old 02-26-2021, 08:51 PM   #61
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@pb4uski insurance premia are deductible medical expenses when you itemize, even though you can't use your HSA for them.
I know that but they also need to exceed 10% 7.5% of AGI before you get any benefit and that excess along with your other itemized expenses (state income taxes, property taxes, mortgage interest, charitable contributions, etc.) need to exceed $25,100 in 2021 in order for you to get any benefit from itemizing.
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Old 02-26-2021, 08:52 PM   #62
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It's down to 7.5% now.
I thought so too but just read something that said it was 10%, but I agree. Congress has jerked it around over the last 5 years.

My main point is that not very many people are in situations where they get a benefit from deducting medical expenses because of the income hurdle and also the itemized deductions hurdle.
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Old 02-26-2021, 09:45 PM   #63
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If you ER'd, you're probably paying for individual health insurance. And you're probably old enough that those premia are OUTRAGEOUS.

The ACA subsidy goes away at an income level of $68,960. 7.5% of that is $5172.

Take my word for it, it is not hard to reach that number even if you're in perfect health.
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Old 02-26-2021, 11:08 PM   #64
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It's situational but even with over $100k of income and two homes we never come close to being able to itemize deductions... nor do any of the 5 other people that I do tax returns for. Especially if you don't have a mortgage.

I read somewhere recently that only 12% of taxpayers itemize even to begin with.
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Old 02-27-2021, 12:13 AM   #65
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It's situational but even with over $100k of income and two homes we never come close to being able to itemize deductions... nor do any of the 5 other people that I do tax returns for. Especially if you don't have a mortgage.

I read somewhere recently that only 12% of taxpayers itemize even to begin with.
I think I have itemized every year since 1982. Small mortgage but high state taxes and charity.

DMIL also itemized every year...with no mortgage (but in Texas with high property taxes).

It happens.
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Old 02-27-2021, 08:08 AM   #66
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I'm confused.... you can only deduct the portion of medical expenses above 10% 7.5% of AGI... so if you have $100k of AGI then you would need over $10k $7.5k of eligible medical expenses to get any benefit... if you had $10k of medical expenses only $2.5k is included in itemized deductions.

If your medical expenses are far less than you planned for are you really getting a benefit from them worth itemizing?

https://hsastore.com/learn/taxes/ite...edical-expense
We anticipated 25K-30K of total annual medical expenses before Medicare. My pension alone put us over the ACA cliff. Fortunately, under the terms of my retirement, I am able to get Megacorp subsidized retiree insurance at much better rates and copays/deductibles than ACA policies, so our medical expenses are more around $16K.

Premiums alone are $12K, which are not eligible for HSA reimbursement. By themselves they put us over 7.5% of AGI. Medical, state/property taxes, charitable contributions, and (through last year) mortgage interest pushes us well over the standard deduction.
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Old 02-27-2021, 08:37 AM   #67
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I know many people who are able to itemize because of large property taxes
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Old 02-27-2021, 09:02 AM   #68
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Originally Posted by twaddle View Post
@pb4uski insurance premia are deductible medical expenses when you itemize, even though you can't use your HSA for them.
It's my understanding that Cobra premiums are an exception and can be paid out of HSA funds as can Medicare premiums.
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Old 02-27-2021, 09:25 AM   #69
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I know many people who are able to itemize because of large property taxes
It's got to be a combination of charitable contributions, medical expenses, mortgage interest, and state and local taxes (including property taxes) that permits them to itemize. I have friends, retired like myself, who pay $21K in real estate taxes (with limited charitable deducations and no major medical expenses) and the standard deduction ($26K) for MFJ still beats their itemized deductions.

I haven't been able to itemize the last two years myself, since they capped SALT at $10K. On the other hand, my BIL with $43K in medical expenses is able to itemize.
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HSA contributions
Old 02-27-2021, 05:53 PM   #70
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HSA contributions

I am retired, age 59, and paying for a high detectable medical plan via COBRA. I was contributing to an HSA while working. Can I contribute to an HSA this year?
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Old 02-27-2021, 06:38 PM   #71
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Chuck Norris turned his HSA into a pot of gold.

No more, no less, that's it.
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Old 02-27-2021, 08:50 PM   #72
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My thoughts too. Well said.
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Old 02-27-2021, 11:58 PM   #73
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I am retired, age 59, and paying for a high detectable medical plan via COBRA. I was contributing to an HSA while working. Can I contribute to an HSA this year?
As long as your high deductible plan is HSA compatible you can continue to contribute this year. I had to open a new account outside of work when I retired. I'd advise opening an HSA account at Fidelity which has no fees and unlimited investment options and you can transfer your work place HSA into that account as well. You may have to have other accounts at Fidelity however.
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Old 03-02-2021, 10:32 AM   #74
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Retired in 2020 and the funds I accumulated in my HSA were automatically switched to a new (HSA Bank) account when my HDHP coverage ended. Husband and I are currently on an ACA plan to bridge the gap until we age into Medicare (approx. 18 mos.) Once we're on Medicare, if it looks like we don't have enough eligible expenses to spend down the balance in a reasonable amount of time, I'll use the leftover HSA $ to reimburse ourselves for the LTC insurance premiums we've been paying the last 10 years or so.
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Old 03-02-2021, 10:38 AM   #75
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Retired in 2020... I'll use the leftover HSA $ to reimburse ourselves for the LTC insurance premiums we've been paying the last 10 years or so.
Possibly rookie question, what are the LTC insurance premiums?

I am early in funding my HSA and want to maximize it so there is "extra" money.

Congratulations on your 2020 retirement!!
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Old 03-02-2021, 11:13 AM   #76
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We purchased Long Term Care Insurance policies when we were both in our 50's and the premiums of $270/month combined were still affordable. Due to family medical history, it made sense for us. I understand trying to purchase the same insurance now is much more expensive, and saw some posts on the forum that others are planning to self fund their Long Term Care if needed.
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Old 03-02-2021, 03:52 PM   #77
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Possibly rookie question, what are the LTC insurance premiums?

I am early in funding my HSA and want to maximize it so there is "extra" money.

Congratulations on your 2020 retirement!!
LTC is Long Term Care.
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