Money Saving Tips for the End of the Year

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The end of the year is quickly approaching. Now is the time to schedule medical, dental, or other healthcare related visits for you and your children that you may have been putting off from earlier in the year. If you can visit your doctor, dentist, or other healthcare professional (or even refill those expensive prescriptions) before December 31, 2005 you will save on having to pay the renewed deductible come January 1.

Another relatively unknown way to save on health insurance costs is by opening a health savings account. A health savings account is similar to a medical IRA. Money is deposited into a designated account which is used to pay medical expenses as they are incurred. When the deductible on your policy has been met, the insurance company starts paying the bills. The plan is like a medical IRA in that you get to keep any money you contribute but do not use, and it grows tax-deferred until retirement. All payments made toward insurance expenses are tax-free. Health savings accounts are particularly beneficial for those persons who have higher deductible plans ($1000 or more). For more information on health savings accounts, visit the United States Treasury website at http://www.treasury.gov/Pages/default.aspx.

Also, when filing your taxes, keep track of how much you have spent on medical expenses for the past year. Under the Internal Revenue Code, section 213, a taxpayer can deduct expenses for diagnosis, treatment and insurance premiums related to medical care. This provision is only applicable if your medical expenses exceed 7.5% of your adjusted gross income.