How to avoid paying extra taxes with the right health insurance policy

Looking to cut your end-of-financial-year tax bill? There’s a smart way of saving money on your tax bill if you’ve had a pay rise or are newly coupled up within the last 12 months – and it involves health insurance.

Taking out even a basic form of eligible hospital cover before July 1 could mean avoiding a surcharge of up to 1.5% of your taxable income. Here’s how the right health insurance can keep your accountant happy and your bank balance higher.

Here’s How You Do It:

Step 1: Select your current life stage below.
Step 2: Once you select your preferred coverage options, you will have the opportunity to compare quotes from multiple health funds.

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How does buying health insurance save you money?

Anybody earning over $90,000 per year – or $180,000 as a couple – who doesn’t have an eligible hospital cover will need to pay the Medicare Levy Surcharge (MLS) when they file their tax return. 

The surcharge can be as much 1.5% of your taxable income

The good news is even low-cost Basic hospital cover policies will be enough to help you avoid the MLS for the period you have the cover. 

The bottom line: if you’re above the threshold, the sooner you get covered, the sooner you stop paying the surcharge.

Does my age have anything to do with health insurance at tax time?

Yes and no. There’s another advantage for Medicare card holders over 31 taking out hospital cover for the first time.

Once you turn 31, every year you don’t hold an eligible hospital policy means you’ll face an additional fee when you do decide to take our cover.

This fee increases by 2% each year and is known as the Lifetime Health Cover loading.

The good news is, like the Medicare Levy Surcharge, taking out even a Basic hospital policy can help you avoid this loading fee at a later date.

It’s easy to compare policies with Health Insurance Comparison. In just a few minutes you can research which cover fits you best from our panel of trusted insurers and then buy online.

So be smart when it comes to your finances and make sure you’re cutting your tax bill and future costs of cover by taking out a hospital policy before the end of the financial year.

Get Started Now:

Step 1: Select your state below .
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.

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*Average savings based off 25,311 customers during 2020

This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

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