If you want to know in which cases you can deduct your health insurance in the income statement, in this article we will explain it to you.
To start, we must consider who can deduct the insurance and in what cases. And it is not the same as a freelancer as a salaried for tax purposes.
These are the cases in which both may deduct health insurance in the personal income tax:
- Self-employed or self-employed people who hire one for themselves or for a direct family member.
- Salaried workers in which the company has contracted medical insurance for its employees.
How these tax benefits apply
Just as there are two different profiles, there are also two different tax benefits. As we have said, the Treasury distinguishes between freelancers and employees. This has its translation in the purpose of health insurance.
If it is a self-employed worker , it is declared as a deductible expense , which will cause the benefits obtained to fall. The amounts can be up to 500 euros for each of the family members, that is, self-employed, spouse or children under 25 years . These amounts are put as deductible expenses and will be subtracted directly from our income.
On the other hand, if it turns out to be a third-party worker to whom the company has contracted health insurance , it is not necessary to pay up to 500 euros. Not even as compensation in kind. This means that the employee earns 500 euros more in the form of private health insurance that is exempt from taxation.
Other insurances that you can deduct in the rent
Health insurance is not the only insurance you should include in the personal income tax. There are other policies that can also generate tax advantages.
Home insurance or that are linked to our mortgage
In order for home or life insurance to be able to deduct on the income statement , they must be linked to a mortgage loan of the usual home.
These are amounts included in the deduction for the acquisition of habitual housing. This means that we will only be able to deduct amounts if they are contracted at the same time you sign your home purchase or rehabilitation mortgage.
So, if your bank required you to take out life or home insurance to grant the loan to get your home, you will have the option to deduct your insurance for the income tax return.
Life and savings insurance
In this case, the deductions will depend on whether the policyholder and the beneficiary are the same person or not. If they turn out to be the same person, the taxation will be done by the IRPF , however, if the person who collects it is different, they will have to pay by means of the Inheritance and Donations Tax (ISD).
Also if the policyholder and the beneficiary are the same person, the insurance will pay a certain amount upon reaching a certain age. If that amount is charged in the form of capital, a similar taxation and a taxable base will be applied to that of other similar financial products.
In addition, these insurances have a different taxation:
- Between € 0 and € 5,999, the tax rate will be 21%
- Between € 6,000 and € 24,000 the tax rate will be 25%
- From € 24,000 the tax rate will be 27%
We can obtain benefits by subtracting the premiums paid from the capital obtained. The insurance company will practice a personal income tax withholding of 19%. If we receive this amount in the form of income, a tax similar to the Movable Capital Income will be applied, with a taxable base of 19%.