Health Insurance Reimbursement
I am a pastor and pay my own taxes thru the quarterly ES form. My wife works outside the home and we get health insurance thru her job. The church reimburses us for this health insurance premiums, that are deducted from her paycheck.
My question is, since the church reimburses us for this do I have to declare it as income? Or can it just be a reimbursement? Before we got the health insurance from my wife, the church paid for it directly, but we found it to be less expensive for the church to just get it from my wife's job, saving the church $8000 a year.
Yes, I believe the payments would be taxable income for you, especially with the insurance being in your wife’s name.
You might want to approach the church about adding the extra into the reimbursement to cover the taxes owed on it. It would still end up being cheaper for the church. $8000! Wow!
Be aware though that the "extra" to cover taxes would be taxable income as well :-)
Know the answer? Face the same situation? Please post your answer or comment by using the "comment" link below. Thank you!