Voluntary Health Insurance Scheme offers a win-win solution to saving money to secure your health as a taxpayer. VHIS encourages everyone to purchase standardized medical insurance plans, which cover hospitalization and related medical expenses. There are bonuses if you are enrolled in a certified plan for this health insurance and you might be eligible for vhis tax deduction. There is a breakdown of what this tax deduction is all about and how to take advantage of it.
Understanding about VHIS
The government-regulated program called VHIS makes private health insurance more affordable and reliable to the people. VHIS covers the following:
- hospitalization
- surgeries
- selected outpatient procedures
Certified VHIS plans are offered to the people, but they should meet the minimum standards set by the government. The government is focused on helping people address their health needs, in case of hospital stays or surgeries.
Facts of VHIS membership
Becoming a member of VHIS gives you a lot of favor in your health insurance. The maximum amount of an insured person guaranteed per year will be up to $8,000. It means you can save a lot from becoming a member in case you are hospitalized. You do not need to look for this money somewhere, just to ensure that you have enough cash during hospital stays.
Who is qualified?
Any taxpayer who pays for a VHIS plan for themselves or dependents is qualified. A member of VHIS shows that tax deduction is automatic, including beneficiaries or dependents, such as:
- Spouse
- Children
- Parents
There is no cap on the insured persons to claim for. If you pay for VHIS plans for yourself and anyone who is a beneficiary, you can deduct up to $32,000.
To give you a clear example:
When you pay $7,000 for annual premiums for your VHIS plan and $6,000 for your mother’s plan, you can claim a total deduction of $13,000. It reduces the overall taxable income.
How to claim the deduction?
Fill the relevant section for the VHIS under deductions, when filing for an individual tax return. Arrange for proof of payment and a policy certificate from your insurer to claim the deduction. The insurance company will issue the VHIS premium statement of your annual tax payment to support the tax deduction claim.
Important things to know
The VHIS plan must be certified by the Health Bureau since not all health insurance plans are qualified for the tax deduction. The person who can claim the deduction is the policyholder who pays for the premium only. When you and your spouse have jointly paid for the policy, you must agree on who claims the deduction. It is not allowed to get double claims for tax deduction.
Supporting documents do not have to be submitted right away, keeping them in case the Inland Revenue Department asks for them.
Conclusion
Claiming for the tax deduction helps a lot with your expenses. Being a VHIS policyholder can help you financially, even to your family. If you or one of your family is facing health expenses, the health insurance coverage will be your backup financially. Aside from the health insurance coverage, it also helps deduct your tax contribution which can have a positive impact on your finances.
