Small Business Tax Strategies

Smart small business owners save thousands of dollars per year on their personal and business taxes by taking advantage of the legal loopholes that the government creates for their unique tax situation. Small Business Tax Strategies cuts through tedious tax code to reveal the bonanza of completely legal opportunities to grow personal wealth and secure an enjoyable retirement.  Learn more about Small Business Tax Strategies and the two free reports you’ll get when you subscribe...

Q. My company was forced to lay off some employees. Do we have to subsidize COBRA payments for married ex-workers? L.M.B., Santa Fe, N.M.

A. Not necessarily. If a worker is involuntarily terminated from the job, the employer generally is required to pay 65% of the premiums needed to continue health insurance under COBRA for up to nine months. The employee has to pay only 35% of the cost. But no subsidy is required if the ex-worker is eligible for coverage under a spouse’s health insurance plan.

Note that this rule differs from the general application of COBRA, where a spouse still can elect to continue coverage and pay for it in full.

Tip: In any event, an employer may recoup its subsidized expenses through a special payroll tax credit or reduced payroll tax deposits.