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Tag Archives: Medical

What is the Difference Between an HSA and a Health FSA?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on April 25, 2023 by Lake Wylie Tax Services StaffApril 25, 2023

Health Savings Account vs Flexible Spending AccountThe tax code provides two tax advantageous plans for taxpayers to pay medical expenses. One is a Flexible Spending Account (FSA) and the other is a Health Savings Account (HSA). The two are often misunderstood and their provisions are frequently mixed up by taxpayers who then fail to take advantage of the tax benefits available from these accounts.

This article explains the workings, qualifications, and tax benefits of each with a side-by-side comparison chart of the two programs. Both have a common theme: contribution to both is made with pre-tax dollars (they reduce taxable income) and distributions to pay qualified medical expenses are tax free. After that the two plans are quite different.

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Posted in Tax Central | Tagged Medical

Are You Caring for a Disabled Family Member?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on March 1, 2023 by Lake Wylie Tax Services StaffMarch 1, 2023

Caring for a Disabled Child or Family MemberMany taxpayers prefer to care for ill or disabled family members in their homes as opposed to placing them in nursing homes, but doing this can be expensive, time-consuming, and exhausting. The government also recognizes home care as a means of reducing the government’s costs in terms of caring for individuals who otherwise would be institutionalized (because they require the type of care that is normally provided in a hospital, nursing facility, or intermediate care facility).

To promote home care and reduce the government’s institutional care expenses, Medicaid (through state agencies) pays home caregivers a small amount of compensation, referred to as a Medicaid waiver payment, to care for an individual in the care provider’s home.

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Posted in Tax Central | Tagged Medical

IRS Finds a Cure for the Family Glitch

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on December 13, 2022 by Lake Wylie Tax Services StaffDecember 13, 2022

Affordable Care Act RevisionsBackground – The Affordable Care Act (ACA) – also referred to as Obamacare) was enacted over 12 years ago, and one of its main features was the creation of government marketplaces (sometimes called exchanges) where Americans could purchase their health insurance if not covered by an affordable employer’s plan. Also included in the ACA was a new tax credit, the Premium Tax Credit (PTC), that could be used to offset some or all of the premiums for policies obtained through the marketplace.

However, that law also contained what some have referred to as “the family glitch” that prevented some families from having access to a health insurance marketplace or taking advantage of the PTC. After more than a decade, the IRS has come up with regulations that will allow, in some cases, these family members to be eligible for the PTC.

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Posted in Tax Central | Tagged Medical, Tax Planning
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