Travel Insurance Tax Tips 2*

If you have a close relationship with a corporation or are self employed.

Then you have more flexibility when it comes to tax planning.

The simplest strategy is to accept travel health insurance as part of your payment/benefits package.

To the corporation or sole proprietor, the cost is fully deductible. However, receiving this benefit can trigger personal income tax for the individual Snowbird (get professional help if you are going to do this)

Health Spending Accounts

One interesting strategy which is gaining popularity is group benefits program called a 'health care spending account'. They need to be set up properly to abide by the proper regulations, but the basic principal is as follows:

A discretionary amount is set aside in trust at the beginning of the employment year.

This amount can be used by the employee throughout the year to pay for elective medical supplies and services (the definition of health services is extremely broad)

The virtue of this approach is that the employer still gains the full deduction, but because the discretionary amount set aside is taken "from the top" of the individual's employment income.

...the elective health services are paid using pre tax dollars! A substantial savings

To be fair, setting up one of these programs is not all that simple and you will need an insurance agent or broker with group benefits experience to help.

But it does make sense if your travel insurance premiums are high and/or if there are some elective procedures you have been considering.

Travel Insurance Tax Tips #1

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*The need for professional advice

This article was written based on the best available information, and provided for general information purposes only. It is no substitute for professional advice.

You should consult a financial planner, a tax specialist, or a group benefits expert before deciding on your personal tax/travel insurance strategy.