As a pensioner of a credit company, I pay for a health insurance policy for my wife and myself. The insurance company has provided me with the declaration of the premium paid separately for the share referring to me and that referring to my wife even though I pay the whole premium. From the examination of the relative mod. 730 pre-compiled for both, the health policy premium is not indicated for either of them. Can you clarify why? Do I have to deduct the premium entirely on my 730 or does everyone have their own share? Where should the premium paid be indicated on the 730? Thanks
For health policies as such, i.e. managed by insurance companies, there is no deduction of the premium paid unless the policy also covers the risk of accidents. In this case, the deduction of the fees paid is only for those in one’s own name or for dependent family members. So if your policy covers accidents and your wife is not dependent, the deduction can only be used by her. If, on the other hand, you pay for a health policy that only covers medical expenses, there is no discount on the premium. On the other hand, in this case, the entire amount of the healthcare costs incurred can be deducted, including those possibly reimbursed.
The tax return is the document with which the taxpayer declares to the Revenue Agency the income received during the year, on which the tax due is calculated.
Many expenses incurred during the year can reduce this tax, thus saving us money. It is therefore important to know which deductible expenses are , to what extent, where and how they are indicated in the tax return and which documents must be kept, also in relation to insurance and health expenses .
What are deductible expenses?
Deductible expenses are those expenses incurred in the reference year of the tax return which must be indicated in the relevant fields of the document and which, in a variable percentage, are subtracted from the tax payable.
Expenses are deductible in different percentages, based on the indications provided each year by the Revenue Agency.
In addition, some expenses include:
- a deductible , i.e. a minimum spending limit, below which it is not possible to obtain any deduction;
- a maximum limit of the expenditure incurred , on which to calculate the deduction. Basically, for these expenses, the deduction cannot exceed a certain maximum amount.
Income tax return 2022: traceability of expenses and income limits
For 2022 there are two news on the deductibility of expenses to know. The traceability of payments
becomes operational . In order to take advantage of the deduction, the expenses must be incurred with traceable means of payment , i.e. made by bank or postal payment, credit or debit card, prepaid card, bank or cashier’s check. The obligation to pay by traceable means is not only foreseen for:
- purchase costs of medicines and medical devices;
- expenses for health services rendered by public or private structures accredited by the National Health Service.
An income limit is established for tax deductions : for some expenses, the deduction is due in full only if the declarant’s income does not exceed 120,000 euros. Beyond this threshold, the reimbursement decreases, until it is canceled for income over 240 thousand euros.
Tax return 2022: deduction for medical expenses
There are numerous health care expenses for which deductions can be obtained . Among these we find:
- medical expenses incurred for themselves;
- health and medical expenses incurred for dependent family members;
- medical expenses and specific assistance for people with disabilities;
- medical expenses incurred abroad.
For medical expenses , only the deductible of 129.11 euros is envisaged , below which it is not possible to obtain the deduction. Therefore, if the total medical expenses exceed the deductible, a 19% deduction can be made on the excess, without any maximum or income limit.
In 730/2021, the sum of the amounts of healthcare expenses incurred by the taxpayer (in his own interest and that of dependent family members) must therefore be indicated and the withholding agent calculates the deduction (equal to 19%) only on the difference between the total expenses and the deductible of 129.11 euros.
It is important to keep the receipts (i.e. those containing the information relating to the drugs purchased and the tax code of the taxpayer or dependent family member) or the tax receipts and invoices made out to the declarant or a family member (for example, for services rendered by doctors or for medical certificates for sports use or for driving licences, the doctor’s receipt or invoice must be kept).
Some health care expenses may not be included as deductibles . These are essentially expenses which, having already been reimbursed to the declarant by various subjects in the reference year of the tax return, obviously cannot give access to further concessions. Among these, for example, there are health expenses compensated by the injurer (or by others on his behalf) for personal injury caused by third parties , or expenses reimbursed by bodies and funds exclusively for welfare purposes .
Healthcare expenses must be entered in Table E of the tax return , in lines E1, E2, and E3.
Deduction for insurance premiums: traceability of payments and income limits
Cash payments are not accepted for insurance premiums tax. Therefore, in order to be able to deduct the shares on insurance premiums, the payment must be made in a traceable way .
The taxpayer must keep a paper proof of the payment (account statement, copy of the postal order or MAV, ATM receipt, etc.), as well as a copy of the insurance contract, with the data of the policyholder and the insured, the type of contract , the effective date and the fiscally relevant amounts.
Alternatively, the traceable payment can be documented with the annotation on the invoice or tax receipt.
The deduction for insurance premiums is due in full, based on the established percentage, provided that the declarant’s income does not exceed 120,000 euros. Above this ceiling, the amount of the deduction decreases progressively, until it is zeroed in the case of income exceeding 240,000 euros.