Does anyone else take into account the tax savings on your healthcare premium deduction and HSA deduction when looking at your healthcare cost?
For example: 24% Tax Bracket, Self-Employed so my healthcare premium is tax deductible.
$5,627 - my annual premium for an HSA-Eligible healthcare plan
$4,150 - max annual HSA Contribution
Tax Savings:
$1,350.48 - Tax savings from self-employed health insurance deduction ($5,627 * .24)
$996.00 - Tax savings from the HSA contribution deduction ($4,150 * .24)
= $2,346.48 total tax savings
If you apply the $2,346.48 tax savings toward the $5,627 premium, then the 'cost' of the premium is actually only $3,280.52. The tax savings effectively lower your premium cost by a whopping ~42%.
I enjoy thinking about it this way because it makes the premium seem less outrageous/easier to swallow. Is this a decent way to look at it, or am I missing anything with this math?
For example: 24% Tax Bracket, Self-Employed so my healthcare premium is tax deductible.
$5,627 - my annual premium for an HSA-Eligible healthcare plan
$4,150 - max annual HSA Contribution
Tax Savings:
$1,350.48 - Tax savings from self-employed health insurance deduction ($5,627 * .24)
$996.00 - Tax savings from the HSA contribution deduction ($4,150 * .24)
= $2,346.48 total tax savings
If you apply the $2,346.48 tax savings toward the $5,627 premium, then the 'cost' of the premium is actually only $3,280.52. The tax savings effectively lower your premium cost by a whopping ~42%.
I enjoy thinking about it this way because it makes the premium seem less outrageous/easier to swallow. Is this a decent way to look at it, or am I missing anything with this math?
Statistics: Posted by 27KaFv — Fri Dec 13, 2024 9:30 am — Replies 3 — Views 113