Subject: Taxing Medical Benefits Comment: Individuals who have annual medical bills ARE NOT ABLE TO DEDUCT 7.5% of their income from the individuals Total Taxable income for the Year. This means that someone who earns say $50,000 annually and pays $10,000 for medical insurance and Doctor bills etc CANNOT DEDUCT $3,750 from His/Her Tax return. This is Law right now. That same Individual who has his medical paid by the employer Gets to deduct ALL of his/her $10,000 from the $50,000 earnings. Our system is currently Very unfair to those who do not have a job or on retirement and pay their medical out of pocket. One side or the other needs to be corrected. The non-taxability compound affect is really magnified with this example: 2 Individuals have $50,000 income. Indiv 1 works and gets $10,000 medical paid and $40,000 W-2. Indiv 2 works or is retired and pays own medical of $10,000. Reports $50,000 income and deducts only $6,250 medical. (7.5% of $50,000 not allowed) Indiv 1 Indiv2 Earns $50,000 Earns $50,000 Pays income tax on Pays income tax on only $40,000 $43,750 The additional tax on Individual #2 is $700 more than Individual#1 It is time to correct this inequity. There is absolutely no justifiable reason to tax 2 individuals differently solely based on MEDICAL OUTLAYS. Hope to hear your thoughts on my observations. I can certainly contribute much more on other improvements. Peter Russo, CPA St Louis, MO |