As the end of the year approaches, there are many conversations centered on health insurance. With Blue Cross exiting the Healthcare Marketplace, premiums have gone through the roof for Medica, and anything NOT in the Marketplace is nearly unaffordable for most people.
If you are a small business owner, there is a regulation that may save you on your taxes. Section 105 is available to one-owner small businesses that employ their spouse. It allows for moving unreimbursed medical expenses and medical insurance premiums to the business as deductible expenses. This basically creates a small business health plan and allows for pre-tax treatment of medical expenses.
TASC is a third-party administrator that offers this subscription. I use it for my accounting business and recommend it to our clients, as appropriate, too. TASC reports that “Section 105 HRA plans save small business owners an average of $5,000 a year on their taxes!”
There is an annual cost to enroll, and online documentation that will be required before you file your taxes. If you keep track of your medical expenses throughout the year, the online input required is straightforward. You can also use annual statements from your doctors, pharmacists and others involved in your health care as support documentation.
To learn more and decide if Section 105 might apply to your business application, give us a call at (913) 888-9100.
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.