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Income Insurance is Tax Deductible
 "Income Insurance is Tax Deductible")
Do you know what your tax savings could be if you have Income Insurance?
Most people understand that Income Insurance premiums are tax deductible, but are unsure exactly what the savings might be for their particular circumstances.
The actual dollar-cost saving will depend on your Income Insurance premium and your Marginal Tax Rate ("MTR"), which is dependent upon your Taxable Income you can click here to check what your particular MTR might be.
In order to illustrate the possible tax implications of Income Insurance premiums and subsequent potential dollar-cost savings, I have prepared the following calculation:
| Description | Without Income Insurance | With Income Insurance |
| Gross Income | $75,000 | $75,000 |
| - Income Insurance Premium | Not Applicable | -$2,500 |
| = Taxable Income | $75,000 | $72,500 |
| - Tax Payable | -$27,947 (32.5% MTR*) | -$27,135 (32.5% MTR*) |
| - Medical Levy Payable | -$1,500 (2% of Taxable Income) | -$1,450 (2% of Taxable Income) |
| Total Tax & Medicare Levy Payable | $29,447 | $28,585 |
| = Net Income | $45,553 | $43,916 |
| Actual Dollar Cost Savings | Not Applicable | $1,638 |
| Net Cost Of income Insurance Premium | Not Applicable | $ 863 |
*MTR = Marginal Tax Rate
It is also worthwhile mentioning that as the Income Insurance premium reduces your taxable income, upon which your Medicare Levy is calculated, not only do you save tax, you also save on Medicare Levy costs further reducing the cost of your Income Insurance premium.
Of course each person's circumstances will differ and therefore I would strongly recommend you seek advice from your professional advisers regarding any potential savings related to Income Insurance premiums.
If you would like more information about Income Insurance or our Financial Planning Services, please don't hesitate to Contact Us and arrange your FREE FINANCIAL ASSESSMENT today - because....#everyoneneedsaplan to ensure they pay the least amount of tax and also make sure that their income is protected!
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