Medical Payments from HRA?

[Mom2Two]

Does anyone (like Tom) know if I pay a big medical bill this year but set up payments, can the payments be deductible from next year's hra?

[Michael]

Wondering if any of these threads would be helpful: https://www.daycare.com/forum/tags.p...tion+-+medical

[TomCopeland]

Originally Posted by Mom2Two

Does anyone (like Tom) know if I pay a big medical bill this year but set up payments, can the payments be deductible from next year's hra?

Yes, assuming you have an HRA plan in both years.

[Mom2Two]

Tom, I called that company and they told me that I did have to employ my husband. Wouldn't that cost me more money though, knwim? Wouldn't I/we end up paying into SS and medicaid?

[TomCopeland]

Originally Posted by Mom2Two

Tom, I called that company and they told me that I did have to employ my husband. Wouldn't that cost me more money though, knwim? Wouldn't I/we end up paying into SS and medicaid?

Federal law does not require you to pay your husband to set up an HRA. I won a US Tax Court case on this point. Some HRA companies (TASC for one) has its own rules and requires some salary be paid to a spouse, even though the law doesn't require this. If you pay your spouse you would have to pay SS and Medicare taxes, but that doesn't cost you much because you would otherwise pay these taxes on your profit. However, you may have to pay state and federal unemployment tax and get workers compensation insurance (depending on the state you are in), so these would be additional costs. You can compare these extra costs with the big tax savings of an HRA to see how much you would benefit.