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Are you maximizing your healthcare tax savings as a business owner?
In this episode, Mike Jesowshek discusses health care-related tax strategies for business owners, focusing on tools like Health Savings Accounts (HSAs), self-employed health insurance deductions, and Medical Expense Reimbursement Plans (Section 105). He explains how these strategies can help business owners minimize taxes while optimizing healthcare costs, both for themselves and their employees. Mike emphasizes the importance of understanding tax laws and maximizing deductions to lower tax liability while ensuring business owners can grow their wealth and take care of their healthcare needs.
Learn how HSAs, Section 105 plans, and self-employed health insurance deductions can lower your tax liability while protecting your health!
[00:00 - 05:53] Health Savings Accounts (HSAs)
- Mike explains how HSAs provide tax benefits: tax deduction on contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
- HSAs are powerful tools for both business owners and individuals, acting as a secondary retirement account for future medical costs.
[05:53 - 10:00] Self-Employed Health Insurance Deductions
- Mike details how self-employed individuals can deduct health insurance costs, focusing on sole proprietors, LLCs, and S corps.
- S corp owners must run health insurance premiums through their business and add them to their W-2s to receive deductions.
[10:00 - 19:27] Health Benefit Options for Small Business Owners with Employees
- Mike discusses section 105 plans or Medical Expense Reimbursement Plans, and how it's useful for business owners with high out-of-pocket medical costs.
- These plans turn medical expenses into business expenses, offering significant tax savings.
- He explains the three primary options: group health insurance, wage increases, or QSEHRA/HRAs to reimburse employees for medical costs.
- QSEHRA is a flexible and cost-effective option for small businesses with fewer than 30 employees.
Quotes:
"Think of an HSA as a secondary retirement plan because, at some point, we’re all going to face medical costs." - Mike Jesowshek, CPA
"If you're self-employed, you get a tax deduction for your health insurance, regardless of whether you cover your employees’ costs or not." - Mike Jesowshek, CPA
"QSEHRA allows small businesses to support their employees’ healthcare needs without the burden of a traditional group health plan." - Mike Jesowshek, CPA
Resources:
Blog: Tax Planning and Health Costs
https://www.taxsavingspodcast.com/blog/Health-Costs-Strategies-for-Small-business-owners
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast
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Small Business Tax Savings Podcast