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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 01-18-2012, 03:28 PM
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jojosmommy jojosmommy is offline
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Default 105 Biz Plan. Help Tom!!

We are not eligible for med benefits through an employer. Which is smarter the 105 biz plan or deducting our premiums through the business without the biz plan? Does it end up the same? If you do not do the biz plan can you deduct the extra costs like amounts paid to the hospital and dentist on your business side or only the personal part of taxes? Does this change how much you save in the end? My husband has not in the past been compensated for working here and helping out b/c of the tax issues but I understand it needs to be a reasonable amount. What in this industry is reasonable and can you not just fund/reimburse their med expenses totally or is that too much to be considered reasonable?
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Old 01-18-2012, 07:44 PM
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TomCopeland TomCopeland is offline
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Default Medical expenses

The only way you can claim medical expenses as a business deduction is to set up a Section 105 medical reimbursement plan.
If you are not eligible to be covered by health insurance through an employer, and you purchase insurance on your own, you can deduct the insurance premiums on your Form 1040, but this is not a business deduction. All other medical expenses could only be deducted as an itemized medical expense on Schedule A.

See my article that explains this in detail:http://www.tomcopelandblog.com/2011/...eductible.html
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