The Good Tax Guide » tax benefits

Tax Deduction on Medical Expenses

Tax Guide — Wed, 25 Mar 2009 07:28:28 +0000

Deductions can be obtained in tax if the medical expenses fall in the category mentioned in the list provided by them. It include expense related to birth control pills prescribed by the doctor, legal abortion, organ donor, food facilities provided by the hospital during the treatment, service fee for the hospital, the expenses related to dogs and other pets, oxygen equipment, prescribed medicines, psychiatric field, nursing wages and other related to the dental issues. Deduction in tax in all these case can be obtained if and only if it is supported by proper valid documents. There are certain other medical and dental expenses for which tax exemptions will not be given. If the medical expenses comes under the category of those which can be deducted then it should not be mentioned in the taxable part. In the taxable part it is necessary to include the medical expenses which do not come under the non taxable part. Social activities, general health improvement program, weight loss programs and many others do not come in the category of non taxable items. So, one must pay the tax for these items. Tax reduction is also given on certain dental expenses. The deduction is also based on the age limit of the person.

Tax on Life Insurance death benefit

Tax Guide — Sun, 01 Feb 2009 08:49:10 +0000

Under normal condition one does not have to pay any tax on life insurance death benefit. But it can be taxable if the amount paid exceeds a particular limit as mentioned in the rules. The amount will be included in the gross taxable income if the amount paid by the life insurance company is more than what they agree to pay at the time of death of the person. This can be explained in a better way with the help of an example. Suppose if the life insurance death benefit is $60,000 and if the company paid you $60,500 at the time of payment. Then the additional $500 paid will be taken as the taxable amount and should be included in the tax return form while filing it. If the amount paid is equal or less than the amount agreed then it will not be included in the taxable amount. Certain companies pay the life instalment benefits on instalment basis. So, if the money is received in the form of installments then you can remove that amount from the taxable part. But proper proof should be given. Also by dividing the amount received into payment in different years one can free it from tax.

Deduction of long term care cost on tax returns

Tax Guide — Sat, 17 Jan 2009 08:47:57 +0000

It is possible to deduct long term care cost on tax returns. It is applicable to the person, his/her spouse or to his dependent if they are affected by chronic illness. According to the rules the reimbursed expenses that are above the 7 and a half percentage of Adjusted Gross Income can be deducted from one’s tax returned. Thus some amount of money can be saved by a person. But the deducted amount must be reimbursed by any reimbursement. It is also necessary to bring the required documents to show that the person is really sick. This document should be of the appropriate type as it has got a legal value. It should also mention the disabilities in doing any of the following things like toileting, bathing, dressing, continence or transferring. The deductions made should be genuine. Otherwise you will have to face the penalties charged by the respective authorities. So the supporting proof or the document should be strong and a valid one. Also there is a limit in amount which is deductible from the tax. So amounts above that will be taxable. So make sure that the amount remains within the limit so that you can enjoy the benefits provided.