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Frequently Asked Questions Insurance

Are my taxes avoided or simply deferred? Won't I owe the IRS money come next April?

Taxes are avoided, not deferred. Premium conversion eliminates the taxes you pay on the part of your salary that pays your FEHB premiums. Since your taxable income is lower with premium conversion, the amount you owe in taxes is reduced. You won't owe the IRS money in April because of premium conversion.

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