Hi mark Kohler here CPA attorney
Talking to you today about health care now
Some of you may be thinking why am I talking to a tax guy a lawyer about health care?
Well, it's because in our law firm an accounting firm, we're helping clients all over the country
Try to save on health care when they're doing their legal and tax planning
This topic is not about how to negotiate with your doctor or how to save a few bucks at the pharmacy
This is about saving on a variety of healthcare costs as a business owner getting the right type of plan
Deducting your healthcare expenses and making a better decision
So on your tax return you save some money and your business saves money on the dollars going out for health care
Let's break it down
It said seven waves let's start with number one save on the ACA taxes. That's the Affordable Care Act
Taxes, some people call it Obamacare taxes, even though we don't get a penalty anymore
If we don't buy insurance
We still have these two types of taxes that play into it the net investment tax in the increased Medicare tax
one is built to
Impact those that may be living on a more passive income or business income and those that have a big salary or day job
The government is trying to raise money to help pay for
Subsidizing these forty million Americans that now get health insurance now, that's okay. I'm not trying to get political
It's a tax and if you make more than two hundred grands single or 250 grand married, you may be paying this tax
So the first step in saving money is to identify if you're subject to this tax S corp income is not subject to the tax
Retirement income is not subject to the tax
If you sell property in a real estate professional you don't pay the tax
You could use a charitable remainder trust to get around the tax
You might do an installment sale when you sell property to keep your income lower so you don't pay the tax
Your accountant should be talking to you about ways to keep you
Under the threshold so you don't pay the tax or adjusting your salary appropriately if you're a small business owner with your S corporation
There's ways around this and if you're not talking about it, you're not saving number two choosing the right type of health insurance
Oh my gosh, this is a huge topic
I've got a chapter on this in my book the tax and legal playbook second edition
The game has changed and I've got all sorts of podcasts on this and other articles
This is a big one. But let me give a few suggestions first. Consider. Are you healthy or unhealthy?
Do you need a high deductible plan or a low deductible plan?
could you do a health care sharing ministry where the
Contributions or premiums are a lot less
You may not get a tax write-off
but you're saving a lot more than paying huge premiums and then look at your network a lot of
Health insurance plans are more expensive when you get a broader network or a network or a hospital that's closer to you
That's why you've got to really dive into it. And I know it's miserable
It's worse than shopping for a new car or going to buying a new cellphone
And being at the store or the car dealership for hours, but you've got to spend a little time
You know what's best for you or your family?
And the type of plan that could save you money before we even talked about making it tax deductible number three
Deduct your health insurance premiums now if you work for the man and you have a day job or corporate job and your health insurance
Is provided for you and you get to select the most coolest premium out there? That's fine. But maybe many of you watching
Don't have that luxury
And so you've got to choose the right plan and then you're gonna be paying for it out of your business or out of pocket
or a portion thereof
That's why I want you to have a small business on the side health insurance premiums are a hundred percent
Deductible in an ordinary income business again, if you're not getting it a write-off for this talk to your accountant
What type of small business do you have on the side? And can we pay for your premiums out of that?
Boom now, we're talking write-off number four the small business health care tax credit
now if you have employees and you're gonna pay for some of their health insurance, and there's some qualifications
Do you have less than 25 employees? And is the average pay less than 50 thousand per year per employee
There are some qualifications, but this is a dollar-for-dollar
Tax credit you get on your tax return up to 50 percent of whatever you paid for for your employees to have health insurance
So think about it if you paid $10,000 in premiums for your employees you get a $5,000 tax credit
Against any other taxes you may owe that's a big deal and it's a perk you may need to offer to attract better employees
So if you're going down that path I again make sure your tax professional knows if you're paying for this
Insurance and if you can qualify for the tax credit, okay, we're gonna go to the white board four five six and seven
It's the easiest way to explain this now. I'm talking about deducting your medical expenses
Not your insurance premiums. I'm talking about co-pays deductibles
dental eyes
massages physical therapy
acupuncture
Over the prescription drug. So did I say that anyway, it's a big list, right?
So I want you to deduct all those expenses now assume you're like well, I'll just put it on my tax return
No, some of you have already faced this right? It's called the itemized deductions or schedule a it sucks
It's terrible ID
97% of Americans that try to deduct their medical expenses as an itemized deduction never get to do it
It's it's terrible and under the increased standard deductions even more Americans are not
Itemizing so I don't want you to think about schedule a that's not what I'm talking about. That's terrible
I've got three ways and this is five six and seven
five
Six and seven are three different strategies that I write a lot about
and you can catch them on other YouTube videos my blog and get to my website and even my podcast for
more deeper discussions about this the three the flexible spending account the health savings account and the
HRA or health reimbursement arrangement now, I've literally shot three hour videos that
That take into account. These three topics is my tax and legal library on my website, man
It will save you thousands
But I want to expose you to this
Because you want to be thinking about these three strategies and if you're taking advantage of one of them all
My clients use one of these or all three you can you can use all three now
The flexible spending account is the user to use it plan. That's the one where at your company
They're gonna give you a couple thousand dollars or thirty five hundred. It's adjusted for inflation every year
You can look up what the rules are for the year you're watching this video
But the flexible spending account is given to you by a big company you turn in your receipts
It comes off of your paycheck and you you don't pay taxes, and this is great
It's kind of a reimbursement plan flexible spending account and you don't pay taxes up to a certain amount
But you use it or lose it and it carries forward a little bit into the upcoming year, but then it is gone
So I don't use this for small business owners
I don't use this at all myself because I don't have a big company giving me a flexible spending account
But if you have it use it just don't lose it now the HSA
Oh my favorite of these three I know man
I love the HRE to the health savings account is like a
supercharged IRA you get tax deductions to put the money in you get
Tax-free income to pull it out at any age. You don't have to wait
So you're fifty nine and a half you can when you're 21 years old and you can invest it
tax-free even
Self-directed you can buy a rental property in your health savings account and all the rental income pay for your health care
Tax-free. I have a health savings account the owns an LLC the owns a rental property
I've had it in there at least eight years all the income from that rental property pays for health care
I don't even file a tax return
What that's a 100% owned LLC by my health savings account
So you get tax deductions to put in the money, it grows tax-free and it comes to out tax-free for any medical expense
this is a big deal now study it because
You've got to make sure you qualify for an HSA by having a higher deductible health care plan
That's why way back at step two. I was talking about choosing the right type of health care plan
Does you want to go into it looking at the big picture? But I love these study them up
I really use these mostly for my healthy clients. Now the HRA is the health reimbursement arrangement
now I love this one because
You can take a tax write-off for all of those out-of-pocket medical expenses
If you have a lot of them see this is let's put it in perspective. This is to use it or lose it and
Then the HSA is like a supercharged IRA. So I'm even gonna put that
supercharged IRA just for health care expenses
And then the HRA is a reimbursement plan and you have to have a small business to do this one
You don't have to have a small business to do an HSA
You just have to have the right type of insurance
but the HRA is a reimbursement arrangement you implement and whether you're single or married, it's gonna look differently and
Depending on what type of business you have. We're gonna structure it differently
We charge usually four or five hundred bucks to design it set it up hand it to you
You self administer it you don't have to have health insurance to do this. Now where this plays out is
I have clients that may have ten twenty thirty thousand dollars in medical expenses. They tapped out the HSA
They tapped out the flexible spending account and they got a lot of medical expenses
I've had this with clients that have children with the autism or learning
Disabilities and they've got a lot of qualifying medical expenses to help them
I've also had clients young or old that have had to go into rehab rehab is a medical expense
your business can pay for that or reimburse it through your family now in getting a tax deduction for
Tens to 20s to thirty thousands of dollars for cancer
Maybe a kidney transplant that I had to come out of pocket for some portion of that or
Again rehab so lots of medical expenses. You want to study up on what?
Qualifies in this is we're talking with your tax professional really matters in summary
Hopefully I just got you excited to learn a bit more about deducting your medical expenses
Properly and structuring your medical properly in your business structure your tax structure your asset protection structure
This is what we do at our law firm. We bring it together in just a couple hours of meetings a year
You should be having that regular meeting with your tax and legal professional. It's this not just pounding it out on turbo tax and
LegalZoom a planner that knows this stuff can change your life
this could mean the difference in making a car payment or a house payment and saving in medical so
Study it up. You may be you don't like me or my firms or what we're doing
That's cool, but study up on it
My books my videos my podcasts my articles will help you get educated enough to make an informed decision
Yes, there are ways to save on health care cost study it up and keep living that American dream
Thanks so much for watching that video and I want to be your source for tax and legal strategies
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