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-   -   Pre-tax Savings (https://www.askmehelpdesk.com/showthread.php?t=152024)

  • Nov 14, 2007, 11:54 AM
    D-11412
    Pre-tax Savings
    How do I calculate how much I will save by using pre-tax deductions for health care expenses?
  • Nov 14, 2007, 12:28 PM
    icecream
    I too would like to know the answer to this.
  • Nov 14, 2007, 01:14 PM
    ScottGem
    It depends on your tax bracket. Basically using pretax dollars means that the payments reduce your taxable income. So your withholding is calculated based on your salary AFTER the deductions are taken. When your company issues you W2, the taxable income will be NET of pretax deductions.
  • Nov 16, 2007, 03:19 PM
    AtlantaTaxExpert
    Well said, Scott.

    Using a Flexible Spending Account (FSA) to pay for non-insured medical costs and co-payments and deductibles is the BEST way tax-wise to pay for medical costs, because MOST people cannot overcome the 7.5% AGI floor on claiming medical costs as an itemized deduction.

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