I referred to these questions - https://money.stackexchange.com/questions/4608/are-cobra-premiums-deductible-when-self-employed and https://money.stackexchange.com/questions/89291/can-cobra-premiums-be-paid-for-pre-tax but it was long time back.
My old job is over, employer regular coverage was till end of Oct, 2019. Starting a contract job(Corp to Corp)-self employed(sole member and owner).
Questions:
1. If i pay COBRA payments(I don't have any money in HSA for 2019)-can it be pre-taxed? Remember COBRA is not an arrangement I made - it's not an insurance from my corporation, it's something from my past job.
2. If COBRA is not pre-tax, how i can get the tax benefits? My medical expenses including premiums are not going beyond 7.5% of AGI(Adjusted Gross Income).
3. I cannot make use of my IRA funds to pay the COBRA premium as I am not unemployed for more than 12 weeks(one can pay COBRA or medical insurance from IRA if they are still on unemployment wages beyond 12 weeks)
How I can get the COBRA not tough for me financially?
The reason I am keeping COBRA is that though it costs more than 4.5 X - it is still better than exchange plans as I have already met the family deductible and only going to pay 10% of any charges. Very soon I will meet out of pocket maximum then I have to pay 0%. I cannot go for some namesake medical insurance because my family need a good one.
My old job is over, employer regular coverage was till end of Oct, 2019. Starting a contract job(Corp to Corp)-self employed(sole member and owner). Is your self employed business going to incorporate ? Or are you going to file a Sch C as a sole prop ?
Questions:
1. If i pay COBRA payments(I don't have any money in HSA for 2019)-can it be pre-taxed? Remember COBRA is not an arrangement I made - it's not an insurance from my corporation, it's something from my past job. Cobra cannot be pre-tax since it is not being paid thru a payroll situation.
2. If COBRA is not pre-tax, how i can get the tax benefits? My medical expenses including premiums are not going beyond 7.5% of AGI(Adjusted Gross Income). If you cannot itemize then the deduction is lost on the Sch A.
3. I cannot make use of my IRA funds to pay the COBRA premium as I am not unemployed for more than 12 weeks(one can pay COBRA or medical insurance from IRA if they are still on unemployment wages beyond 12 weeks) If you have an HSA account already you can make a ONE TIME transfer from the IRA to the HSA then pay the cobra from that HSA account.