Is Healthcare Sharing Tax Deductible?

If your church is experiencing some sticker shock with your 2021 health insurance increases, you’re not alone. Many people are searching for alternative healthcare solutions, including health reimbursement arrangements (HRAs) and healthcare sharing ministries. Healthcare sharing ministries are cost-sharing programs or private healthcare systems (PHCS) that are set up as a faith-based 501(c)3 not-for-profit organization. Members share religious…

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Can I contribute to an HSA and an FSA at the same time?

Married clergy often have a choice of health options with their spouse. One common question is whether you can contribute to both an HSA and an FSA at the same time. The answer is usually no, but like most tax questions, there are a few exceptions. IRS publication 969 (https://www.irs.gov/pub/irs-pdf/p969.pdf) answers this question for us:…

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Medical Deduction Threshold Raised to 10% for 2019

Claiming a medical deduction on your 2019 return is going to be even more difficult than on your 2018 return. Previously, taxpayers needed to itemize and spend at least 7.5% of their adjusted gross on unreimbursed medical expenses before they got to deduct anything. Now the threshold has been raised to 10% of your adjusted…

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Health Care Penalty Removed, but Premium Tax Credit Still in Play

Before 2019, individuals were required to enroll in qualifying health insurance or they would receive a tax penalty. This was called “minimum essential coverage”. You may remember receiving a 1095 form showing all the months that you had coverage. If you didn’t have insurance or you had an insurance gap, you also might have received…

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Healthcare Penalty going away in 2019

Prior to 2019, if you failed to maintain adequate health insurance coverage, you could be assessed a penalty on your tax return. This penalty was based on your income and could be quite expensive if you went two or months without health care coverage. According to healthcare.gov, starting in 2019 the “Individual Shared Responsibility Penalty”…

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Saving Money with an HSA

If you’re looking to save some tax dollars and pay for your medical expenses at the same time, a Health Savings Account is one of the best options currently available. One of the reasons that a Health Savings Account is useful is because of how difficult it can be to get a deduction for medical…

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Church Health Reimbursement Arrangement (QSEHRA)

A qualified small employer (one that employs fewer than 50 full-time (including full-time equivalent) employees, and does not offer a group health plan to any of its employees) may offer a QSEHRA to its employees for the payment or reimbursement of eligible medical expenses (including individual insurance policy premiums) on a pre-tax basis. The QSEHRA…

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HSA Contributions Can Be Deductible, Even if You Don’t Itemize

If you contribute to an HSA, you may be able to deduct those payments from your total taxable income in 2018. Unlike regular medical expenses (which you don’t get to claim if you take the standard deduction), HSA contributions are taken as an adjustment to your income. Even if you take the standard deduction, HSA…

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Guide to Minister’s Compensation

You may find it helpful to begin by considering the goals of a compensation package. A church should provide its staff with adequate income so that they can fulfill their roles without undue concern about current and future financial needs. Freedom from financial anxiety lets the minister focus on his or her service. It also helps your church…

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