Medical Bills; Get buried by them or get the deduction!

Small business owners already pay large sums of money just to have medical coverage for themselves and their families. Then comes the inevitable doctor visits, hospital stays and emergency dental work. Unplanned medical bills - they can come on fast and are unforgiving. One often overlooked solution is to hire your spouse as an employee. You can then offer health insurance to your “employee” that covers them and their family (by extension…you). With this setup you can qualify for small business group insurance (the owner plus one employee often qualifies you for this type of coverage which is usually cheaper than individual family coverage). Most small group plans won’t subject you and your employee to any physical exams either. You can also set up a medical reimbursement plan, which reimburses your employee for any out-of-pocket medical expenses paid by their family (by extension…you) such as copays, prescriptions and some over the counter treatments. The medical reimbursement paid out to your ‘employee’ is also a deduction for the business. Most individuals filing jointly never reach over 7.5% of their adjusted gross income in order to deduct their medical expenses so by structuring your small business this way, it can be a win-win situation. It’s almost like the money never left your bank account. As with all financial decisions, you should always consult your CPA (certified public accountant) who prepares your tax returns prior to making any business changes.