"The government's gonna pay for it" -- (D)onald Trump
[The Trump Tapes: Vol. 1]
http://www.youtube.com/watch?v=rcUCLwWCihE
If you have health insurance through your employer under a qualified Section 125 plan (as most employer sponsored plans are) then your payroll deductions for your share of the premiums are deducted on a pre-tax basis and so are already excluded from your taxable income, i.e. they are already tax free and additionally you are not currently taxed for your employers share of the premiums. So I very much doubt that under Trumps plan you would be allowed to double dip and deduct those premiums again. Unless he plans to eliminate the pre-tax deductions which would be IMO, a very bad idea.
For people who are self-employed and pay for a private insurance plan, those insurance premiums are in most cases already tax deductible and have been for many years and actually under ACA (Obamacare) the deduction was made it easier and FWIW was increased to 100% in 2003.
Self-employed health insurance deduction 2015
Deduction for self employed isnt new
If you buy your own health insurance, you should definitely know about the long-standing health insurance premium deduction for the self-employed.
Congress implemented a 25 percent deduction on self-employed health insurance premiums in 1987 and made it permanent in 1994. The self-employed received even better news in 2003 when premiums became 100 percent deductible.
The deduction which youll find on Form 1040, Line 29 allows self-employed people to reduce their adjusted gross income by the amount they pay in health insurance premiums during a given year. Youll find the deduction on your personal income tax form, and you can file for it if you were self-employed and showed a profit for the year.
Are Health Insurance Premiums Tax Deductible?
As to the tax deductibility of all insurance premiums and the great expansion of Medicaid:
Trumps proposal to exclude all health insurance purchases from taxation is a terrible idea. The principal reason why health care is so expensive in America is that we heavily subsidize its consumption through the tax code and through entitlement spending, to the tune of $1.8 trillion a year. Trumps proposal would make health care even less affordable than it already is, and has the potential to significantly increase the deficit. Spending on Medicare would increase by at least $800 billion over the next decade. The tax changes could increase the deficit by another trillion or so.
The end result of Trumps proposed changes would be far fewer people with health insurance, and far costlier health care: precisely the opposite of Trumps goal of covering everybody and reducing costs. Notably, theres absolutely nothing in the plan about covering people with pre-existing conditions, something that Trump has claimed as one of his highest priorities.
The Most Important Thing About Donald Trump's Health Reform Plan Is That Trump Didn't Write It
And wasnt Medicaid expansion heralded to be one of the best things about ACA (Obamacare) and hasnt it been proven to be an expensive disaster for the 30 states that entered into it?
Medicaid Expansion Is Proving to Be a Bad Bargain for States
Again, just like the section on HSAs, I dont see anything here to jump up and down over. I would think allowing individuals who do not have or qualify for employer provided Section 125 health plans (pre-tax payroll deductions) or who are not self-employed to be able to deduct their health insurance premiums and or lowering the threshold for deducting out of pocket medical expenses which currently has to exceed 10% of AGI, may not be a bad idea but then again it might not be a good idea either. The increased cost in the form of lower tax revenues would have to be offset by either increased revenue or spending cuts elsewhere. Free or tax free is never either in reality.
How come the press doesn't care??