Deduct 100% of Your Medical Expenses

As an employer, you may provide as a benefit to your employees a Medical Expense Reimbursement Plan. This benefit covers the qualified medical expenses of the employee as well as their dependent family members, including you the business owner (as the spouse of the employee). amounts paid under this plan are deductible by you, the employer, and excluded from the gross income of the employee-spouse. There are specific IRS code directed requirements that come with this powerful benefit and they must be followed carefully, hence the need for competent professional tax quidance is recommended

These requirements are:

  • Regulations require that a written agreementbe in place before a medical reimbursemtn plan can be implemented. 
  • Spouse must be a bona fide employeeand provide legitimate services to your business. 
  • Insurance coverage purchased by the business should be in the name of the employee-spouse, not the employer-spouse.
  • Spouse may not be a joint owner or co-owner of the business.

“Making Tax A Game” includes a qualification checklist as well as sample medical reimbursement plan. In addition, there are step by step instructions for setting up and maintaining such a plan. “Making Tax A Game” cautions that you will generally will receive greater benefit by participating in the benefit plan of your primary employer (if any) rather than through the reimbursement of medical expenses as an employee benefit of your own home business.

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