How do I calculate how much I will save by using pre-tax deductions for health care expenses?
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How do I calculate how much I will save by using pre-tax deductions for health care expenses?
I too would like to know the answer to this.
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.
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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