by Terri Zwierzynski
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More Details about medical reimbursement plans here.
A common mistake self-employed solo entrepreneurs make is not taking advantage of all the tax deductions available to their business. You may be familiar with the home business deduction, mileage and meal reimbursement, and other common deductions. But there is one tax provision that is not as well-known, but is clearly worth far more than all the typical deductions put together: a Section 105 Medical Reimbursement Plan.
Given the skyrocketing costs of medical insurance, copays, deductibles and other out-of-pocket expenses, this one deduction can save you, quite literally, thousands of dollars a year. You must be married and able to legitimately employ your spouse at least part-time in your business in order to qualify. If you are and you can, read on -- your heartburn over outrageous health insurance premiums and skyrocketing medical expenses may be about to go away!
Here's the bottom line: with the requirements met and the proper paperwork in place, you can:
- Deduct 100% of your family health insurance premiums,
- Deduct 100% of out-of-pocket family medical and dental expenses,
- Save a huge chunk in federal, state, and self-employment taxes!
How do you qualify? You must have a properly documented employment agreement with your spouse, and the work performed and compensation package must be reasonable. Complete records of the premiums and expenses and their reimbursement are required. Ugh, more paperwork...but help is on the way!
I've been very impressed with the BizPlan/AgriPlan Section 105 Medical Reimbursement Plan, offered by TASC (Total Administrative Services Corporation). Recommended by a colleague (who saves several thousand dollars every year with this plan), I've found TASC to be a very professional company that takes its obligations to its self-employed customers very seriously, including offering a tax audit guarantee. And the annual cost is very reasonable, starting at under $200.
Don't wait -- you can only deduct expenses that occur in or after the month you apply for the plan. Consult your accountant, and check out BizPlan today, for maximum tax savings this year!
Keywords: self-employed, medical reimbursement plans, tax deductions, self-employment taxes, section 105
About the Author
Terri Zwierzynski, Cary, North Carolina, USA
More Details about medical reimbursement plans here.
Terri Z is The Solo-CEO: a self-employed internet marketing consultant to solo entrepreneurs, freelance writer, and grassroots promoter of the solo entrepreneur lifestyle. She runs www.Solo-E.com, the resource website for solo entrepreneurs which attracts thousands of visitors monthly from over 100 countries on six continents (and was named a finalist for “Website of the Year” in the 4th Annual Stevie® Awards for Women in Business).
Download our popular ebook, "25 Surefire Ways to Capture More Clients, Get More Done in Less Time, and Make More Money -- in 90 Days or Less."
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Self-Employment Taxes: Minimize with a Medical Reimbursement Plan
