Should I Itemize Taxes? – Itemized Income Tax Deductions

Should You Itemize Your Federal Tax Return?

In the rush of tax season many individuals decide to just take the standard deduction rather than to itemize income tax deductions. If you take the time to look at your situation, you may see that itemizing will save you money on your taxes. There are many different deductions that may save you money which are not included in your standard deductions.

For example, if you own a home you may be able to deduct your mortgage interest or your private mortgage insurance. This may not apply if your income exceeds certain levels but is definitely worth taking the time to review. You may also itemize your health insurance premiums if you are not already paying them pre-tax. These are just a couple of the many things to consider when deciding whether you should itemize or not. Many of us wonder if we should itemize income tax deductions.

There are also many different miscellaneous tax deductions that are often overlooked. Many individuals are not aware that they may deduct the actual cost of preparing their taxes.

Itemizing can seem overwhelming for many, especially if you are preparing your taxes yourself, but you may want to consider using tax software such as Turbo Tax to assist you in the process.

If you are looking for a fast and simple way to itemize try TurboTax. TurboTax is free to use and there is no charge unless you decide to use their services to file or print your taxes.

To learn more about itemizing income tax deductions please visit TurboTax Online. Once you are there you will find all the necessary programs to assist you in itemizing your tax returns.

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2009 Stimulus Bill Changes Cobra Plan for Unemployed Workers

As you know employers are required to provide health insurance coverage for 18 months after an employee leaves his job under the Cobra act. What has changed with the Cobra law under the new 2009 stimulus plan from the Obama administration may surprise many people.

The provisions embedded in the over $800 billion dollar stimulus plan that passed, would load employers down with new provisions for Cobra administrators. This will be the biggest change ever since Congress enacted the law in 1986 to help Americans maintain health care coverage. The additional Cobra provision under H.R. 598 has two major measures that have a massive cost for today and tomorrow.

First, if an individual stops working as early as age 55, they could retain Cobra coverage until they reach Medicare eligibility. It also doesn’t matter how long they have worked for the employer either. They would still be eligible under this new twist to the economic stimulus plan pushed through by mostly Democrats.

The law currently allows for health insurance coverage for only 18 months after the employee leaves. Under current Cobra law, the employee must pay 102% of the health insurance premium or the coverage is lost.

Second, the Cobra bill provides for a federal “COBRA Premium Subsidy” for employees that were laid off from Sept. 1, 2008, through Dec. 31, 2009. The subsidy will cover 65% of the health insurance premium payment for up to 9 months through a Cobra plan provider. The provider will receive compensation in the form of a tax credit to cover the shortfall in the insurance premium payment.

There has been little opposition to the plan given the economic slump that started in 2008 and seems to be headed deep into 2009. Most employers agree that to provide assistance with health insurance premiums on a temporary basis is an excellent idea.

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COBRA Alternatives – Advantages and Disadvantages

 

Affordable Health Coverage:

The premium costs for someone contemplating purchasing health insurance under the provisions of COBRA can be prohibitive. Perhaps that is why only 20% of eligible people choose to enter the program. Many of these people are living on unemployment compensation, which makes the idea of paying high health-insurance premiums seem completely out of reach. The people that do not opt in to the COBRA program choose to purchase private insurance plans, or choose to have no insurance plan at all.

The law does not give people much time to make a decision about whether or not they want to use their benefits under COBRA. They only have 60 days after employment separation before eligibility ends. Choosing to purchase private health insurance is a good option for most of these people.

Here are some of the advantages of using COBRA alternatives:

· Affordable medical plans: Premiums are usually less expensive for private health insurance than for premiums under a COBRA sponsored plan. Saving money is important, especially for people who are surviving on unemployment compensation.

· People can choose from a variety of different health care plans. Health insurance agents often have a variety of plans available to people who need insurance. The options and prices vary from company to company. Shoppers decrease premiums by choosing plans with high deductibles and preferred providers.

· Health insurance agents act as liaisons and advocates between the health insurance companies and their clients. They can advise clients on coverage options that are suitable for their needs. Having someone to explain the ins and outs of complicated health insurance process is perhaps the best part of having a health-insurance agent.

Disadvantages of using COBRA alternatives:

· Policies may not have coverage that is as extensive as an employer sponsored health care plan. Conditions like prenatal care and pregnancy are sometimes excluded from private health insurance plans. Employer-sponsored plans usually cover these conditions.

· Private health insurance plans often have exclusions for pre-existing conditions. An employee who continues under their form employer sponsored plan usually does not have a problem with pre-existing conditions being excluded.

· Higher deductibles are common with private health insurance plans. This means the covered person will have to spend more out of his own pocket for certain conditions and treatments.

The disadvantages are relatively few for plans offered through the private sector. In fact, the advantages far outweigh the disadvantages for most people. Those who want to shop for a health-insurance policy need to act quickly to find an agent or company that suits their health insurance needs.

 

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