Strategy: Set up a self-insured medical reimbursement plan—also called a Section 105 plan—for your business. This kind of plan reimburses specified medical expenses to your employees—and to you—from the business’s coffers.
Assuming that the plan is in writing and meets other technical requirements, it’s a win/win situation. As the employer, you can deduct the reimbursements, including those to cover employees’ out-of-pocket medical costs. And eligible employees generally aren’t taxed on this perfectly legal .
Sound too good to be true? The IRS approved this medical reimbursement setup years ago. (IRS Revenue Ruling 1971-588) But you must toe the line to avoid any tax trouble.
Here’s the whole story: Typically, a Sectio...(register to read more)
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Small Business Tax Deduction Strategies
- Tax cuts on the odometer
- Lessons from the Tax Court: No reprieve from 100% penalty
- Nab tax breaks, dodge traps, in new small biz law
- Use progressive discipline—or prepare to pay unemployment even if conduct was outrageous