In order to use it, consumers have to deviate from the tax, as reported by the “Lohnsteuerhilfe Bayern” (lohi Bayern). This allowed us to do it. up to 5000 euros in taxes save, write the number of experts. This works both for those who have private health insurance and for citizens who voluntarily subscribe to a health insurance company.
Increase “precautionary expenses” with extra payments
The tax law allows advance payments of health insurance contributions up to three times the annual amount, according to the statements. This means that PKV members can pay their contributions in the current year 2023 until the end of 2026. Higher expenses can greatly reduce taxes. Speed is important: everything must be done by December 21 be completed. According to the report, some suppliers deviate from this deadline and require payment to be received before December 15 .
Double tax savings effect
Smart people could benefit from two effects:
- There would be a tax saving for the year of advance payment in which the health insurance contributions are transferred, i.e. 2023. Contributions paid for the future can be fully deducted from taxes.
- In the following years there will be a further tax reduction: “additional personal insurance contributions”, for example for BU and dental supplements, can then be deducted up to the maximum limit. These additional amounts outside of health insurance usually have no tax-reducing effect because almost no one can use them.
This “double trick” helps to deduct health insurance contributions as much as possible and thus achieve great savings. However, the exact amount of the tax cut depends on
- personal tax rate
- Type of income tax settlement (single or couple)
- Quotation model for the respective PKV
A quick look at the tax law
The legislator makes a distinction when it comes to pension contributions. On the one hand, there are (basic) contributions to health and healthcare insurance. Amounts incurred here may be fully tax deductible.
There are also other contributions to pensions. This includes all other insurance affecting life and limb, i.e. quotes for policies such as
- Laboral inhability
- Responsibility
- Medical and dental supplement.
- life at risk
- Accident
The concepts mentioned here can be used as excise tax expenses. At least in principle. However, many policyholders cannot specify these amounts.
Legal requirements limit the deduction of special expenses for employees with an employer subsidy and for civil servants with an annuity subsidy. €1900 . The tax authorities will not accept anything else. These maximum amounts have already been exhausted by basic health insurance, which enjoys tax priority. Therefore, other insurance contributions are ignored for tax purposes.
The recommended tax trick prevents this. In 2023, multi-year contributions for basic health insurance can be deducted. In the coming years, other precautionary expenses such as BU, civil liability and dental supplements will increase.
Here's how to do it
It is very important to meet the deadlines mentioned above, i.e. December 21 and 15.
Anyone interested should also contact their private health insurance provider in advance. You can find out if there are other special savings options, such as early payment discounts. In these cases some providers are said to offer premium reductions of up to five percent. This discount also applies to the employer's share of the private health insurance premium. Important for those who feel insecure: Anyone who prematurely abandons their private health insurance will receive a refund for the excess contributions paid, according to the Bavarian Income Tax Assistance.
Since the model requires the insured to also anticipate the employer's actions, higher free amounts are required, such as daily money deposited in a bank. In the future, the employer's share of the private health insurance premium will continue to go to his account each month and will of course be deducted from special expenses.
Calculation example: A couple has a marginal tax rate of 30 percent. You pay your private health insurance contributions one year in advance. This creates an extra bonus of 11,000 euros. This means 3,300 euros less in taxes. If necessary, solidarity contributions and church tax are also added.
Who benefits from everything?
Singles and couples who have both private health insurance can use the procedure described. To benefit from the maximum tax saving effect, both partners must pay the contributions in advance.
Couples could also use the model if one of them is a member of a health insurance company. For this partner, however, prepayment only reduces taxes in the current year.
If you can't cover very large amounts with your parked money, you can also use a one or two year advance payment. However, the amount of taxes saved decreases.