Open enrollment is also a tax decision

Open enrollment at work is wrapping up, and plans bought on the Health Insurance Marketplace open for enrollment on November 1. Whichever you’re doing, the choice reaches your tax return.

Health savings accounts

If you pick a high-deductible plan that qualifies, you may be able to contribute to a health savings account, and those contributions can lower your taxable income. The limits change each year, so ask before you set a payroll deduction.

Flexible spending accounts

Money you set aside for a flexible spending account is taken from your pay before tax, but most plans have a deadline for using it. Estimate carefully.

If you buy your own plan

Self-employed people can often deduct what they pay for health insurance, as long as they weren’t eligible for a plan through an employer or a spouse’s employer for those months.

If you get a Marketplace credit

The premium tax credit is based on an income estimate and settled on your tax return. If your income changed a lot this year, update your estimate, or you could owe money in April.

This is general information, not tax advice for your own situation. A short call with us can tell you what applies to you.