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Subject Author Date
Corporate Medical Expenses Deductable? ggddaaddyy66 04-30-2007
Posted by ggddaaddyy66 on April 30, 2007, 11:22 am
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 I'm about to start a simple corporation in Reno. It will
sell services and it will have 1 employee who is also the
owner.

I'm thinking about the S Corp vs C Corp tradeoffs.

One tradeoff I need information about is the ability to
deduct medical expenses.

It's my understanding that a C Corp can deduct 100% of
medical insurance premiums paid on behalf of employees.

Is it possible to supply a deductable benefit to them which
pays for actual medical expenses?

I want my C corp to pay for medical costs which are not
covered by the group inusrance policy.

Another question which is a bit off topic:
Is it difficult to obtain a medical policy in the name of a
corporation which covers just one person?

-Bob

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Posted by Paul Thomas, CPA on May 1, 2007, 7:12 pm
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> I'm about to start a simple corporation in Reno. It will
> sell services and it will have 1 employee who is also the
> owner.
>
> I'm thinking about the S Corp vs C Corp tradeoffs.
>
> One tradeoff I need information about is the ability to
> deduct medical expenses.
>
> It's my understanding that a C Corp can deduct 100% of
> medical insurance premiums paid on behalf of employees.
>
> Is it possible to supply a deductable benefit to them which
> pays for actual medical expenses?
>
> I want my C corp to pay for medical costs which are not
> covered by the group inusrance policy.

There are some medical benefits that can be provided to the
employee/shareholder. Section 529 can be part of that plan
if you like. Talk to yoru insurance provider as to what they
suggest as well.

> Another question which is a bit off topic:
> Is it difficult to obtain a medical policy in the name of a
> corporation which covers just one person?

You'll find that the costs will be higher, but if the price
is high enough someone will insure you.

--
Paul A. Thomas, CPA
Athens, Georgia

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Victor Roberts on May 1, 2007, 7:12 pm
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gddaaddyy66@yahoo.com wrote:

> I'm about to start a simple corporation in Reno. It will
> sell services and it will have 1 employee who is also the
> owner.
>
> I'm thinking about the S Corp vs C Corp tradeoffs.
>
> One tradeoff I need information about is the ability to
> deduct medical expenses.
>
> It's my understanding that a C Corp can deduct 100% of
> medical insurance premiums paid on behalf of employees.
>
> Is it possible to supply a deductable benefit to them which
> pays for actual medical expenses?
>
> I want my C corp to pay for medical costs which are not
> covered by the group inusrance policy.

I'm not a tax pro, but based on the advice of my accountant
I decided to form a C Corp instead of an S Corp or an LLC
for my single-employee consulting company for medical
expense reasons.

Under the C Corp I set up a written Medical Reimbursement
Plan that reimburses all employees for medical expenses not
paid medical insurance, such as the annual deductible,
co-pays and OTC drugs. The plan also covers medical
insurance premiums. The maximum reimbursement per year is
based on the salary paid that year to the employee. It is
my understanding this such a plan would not be available to
an owner of an S Corp. I suggest you speak to a tax
professional and have them suggest, in writing, a reasonable
cap for your medical reimbursement plan.

> Another question which is a bit off topic:
> Is it difficult to obtain a medical policy in the name of a
> corporation which covers just one person?

There are policies for Sole Proprietors, but I have never
seen a S or C Corp plan for less than 2 employees. This, of
course, will vary by state.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by DORFMONT@aol.com (Linda Dorfmo on May 1, 2007, 7:12 pm
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ggddaaddy...@yahoo.com wrote:

> I'm about to start a simple corporation in Reno. It will
> sell services and it will have 1 employee who is also the
> owner.
>
> I'm thinking about the S Corp vs C Corp tradeoffs.
>
> One tradeoff I need information about is the ability to
> deduct medical expenses.
>
> It's my understanding that a C Corp can deduct 100% of
> medical insurance premiums paid on behalf of employees.
>
> Is it possible to supply a deductable benefit to them which
> pays for actual medical expenses?
>
> I want my C corp to pay for medical costs which are not
> covered by the group inusrance policy.
>
> Another question which is a bit off topic:
> Is it difficult to obtain a medical policy in the name of a
> corporation which covers just one person?

You need to develop (very expensive) or buy an approved
corporate plan which supports Section 105. This plan will
allow you to purchase and be reimbursed for any medical
insurance, medical expenses, dental and vision care and life
insurance. Go to www.AgriPlan-BizPlan.com to learn more
about this plan. I have been sending my corporate clients to
them for the legal paperwork for years.

I doubt you can purchase corporate health insurance for only
one person. In California it is impossible to buy insurance
for a group smaller than 3 people.

Linda Dorfmont E.A., CFP, CSA

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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