Any California income tax experts out there. I have some questions regarding deductions on income tax returns?
On your federal and state income tax if you have your employer take out money for short term disability insurance and long term disability insurance (this is in addition to what your employer offers), are these 2 deductible? Also, on a cafeteria plan, I know that the money comes out pre-taxed, but is there any part of that money that you can claim or deduct on your taxes? My brother has this through his work and this is the first year he is filing single, legally separated. He tried Turbo Tax without putting in the long & short term insurances as well as nothing for the medical expenses since he is on this cafeteria plan. Just wondering if these are deductible before I take all his paperwork to the tax guy tomorrow (and shell out $200) to see if they can come up with something as right now it's saying he owes bucks which he doesn't have. Thanks so much all you tax savvy individuals!! :o) Forgot to add, he has the long & short term disability insurance as well as money for dental & medical premiums all taken out as section 125. Is any of this deductible or is he totally screwed? Thanks again! Oops, didn't finish my sentence....doesn't have the money. Unfortunately, he doesn't even have the money to make payment plans thanks to the blood-sucking vampira he's legally separated from and his own attorney. Oh well, thanks for answering my question, this clears it up. I've never used a cafeteria plan with any employer so I wasn't too familiar with it other than I knew it was pre-tax. Thanks again!
Public Comments
- (Corrected answer) Aparently one CAN use a cafeteria plan to pay for STD/LTD. I did not know that. The rest of my answer stands. Any money that you use through a cafeteria plan is money that you "never techincally got". It "isn't taxable income to you". Therefore, there is no provision in the Internal Revenue Code to take a deduction for it. You can't write off, on Schedule A for example, money you used to pay for a doctor if you used got reimbursed from your cafeteria plan (a.k.a. Section 125 plan). The IRS does not allow people to double dip. If you didn't "get" the income, you can't write it off when you spend it. The problem with using a 125 plan to pay for STD/LTD is when/if you get paid by the plan, the money is taxable income to you. The payments are taxable because the money used to pay for the premiums is pre-tax. You said, "he owes bucks which he doesn't have". You mean he owes more in tax than he has? There are plans he can agree to with the IRS to make payments on the money he owes. Please see the link below.
