Health care insurance as a company expense?

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sw_ross

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As a one man shop I’m wondering about having my company provide my health insurance and use it as an expense item?
I’ll be asking this question to my accountant but I was just curious if any of you do this already?
Thanks
 
I use TurboTax Home and Business; I know my (and my wife's) medical insurance is thus deductible, but THINK it is limited to my business profit. You should be able to find info on irs.gov if you want it.
 
GeorgeB said:
I use TurboTax Home and Business; I know my (and my wife's) medical insurance is thus deductible, but THINK it is limited to my business profit. You should be able to find info on irs.gov if you want it.
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One of the features of the Affordable Health Care Act, IIRC, is there may be some limitations on deductibility for "Cadillac" plans. Those are plans that grant coverage far above what is considered "normal", whatever normal is.

 
GeorgeB said:
I use TurboTax Home and Business; I know my (and my wife's) medical insurance is thus deductible, but THINK it is limited to my business profit. You should be able to find info on irs.gov if you want it.
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All expenses are limited to profits. You do not get a tax credit for losing money.
 
petersonra said:
only does you any good if you eventually turn a profit.
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If you don't eventually turn a profit, at some very near future point, you won't have to worry about it at all. Unless you have one of those Hollywood accountants who can take a picture with $1.5 billion in worldwide sales and $200 million in production costs and turn it into a money loser.
 
gadfly56 said:
If you don't eventually turn a profit, at some very near future point, you won't have to worry about it at all. Unless you have one of those Hollywood accountants who can take a picture with $1.5 billion in worldwide sales and $200 million in production costs and turn it into a money loser.
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They are not losers according to the IRS though. Just to the people expecting a cut of the profits. It is a crazy business and one would think everyone involved in it would understand the crazy accounting that goes on but apparently not.
 
petersonra said:
They are not losers according to the IRS though. Just to the people expecting a cut of the profits. It is a crazy business and one would think everyone involved in it would understand the crazy accounting that goes on but apparently not.
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Supposedly, no movie made in Hollywood has -ever- made a profit! That's why you always want a cut of the gross, not the net!
 
PaulMmn said:
Supposedly, no movie made in Hollywood has -ever- made a profit! That's why you always want a cut of the gross, not the net!
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No actor or higher up production member makes this mistake more than once; never, if they have a competent agent.
 
petersonra said:
All expenses are limited to profits. You do not get a tax credit for losing money.
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There is no such thing as a net loss to the IRS then?

If a business experiences a net loss, they usually need to depend on assets they already have or to borrow money or maybe a little of both in order to keep operating usually with intent they will profit again.
Might be true you can't get a tax credit for losing money, but there can be expenses that can be applied over time for tax purposes rather than all at once as well. Many capital expenditures are the most commonly ones expensed over time. An accountants advice is likely needed for OP. I've used this kind of expense for a health care plan myself. I believe the main key is having proper documentation and implementation of said plan should you ever be audited. Often your accountant can administer such plan or recommend a third party that does this. Nothing says you can't administer your own plan, but you need to make sure you do it in accordance with the laws and they can change from time to time so you also need to keep up with those changes.
 
kwired said:
There is no such thing as a net loss to the IRS then?

If a business experiences a net loss, they usually need to depend on assets they already have or to borrow money or maybe a little of both in order to keep operating usually with intent they will profit again.
Might be true you can't get a tax credit for losing money, but there can be expenses that can be applied over time for tax purposes rather than all at once as well. Many capital expenditures are the most commonly ones expensed over time. An accountants advice is likely needed for OP. I've used this kind of expense for a health care plan myself. I believe the main key is having proper documentation and implementation of said plan should you ever be audited. Often your accountant can administer such plan or recommend a third party that does this. Nothing says you can't administer your own plan, but you need to make sure you do it in accordance with the laws and they can change from time to time so you also need to keep up with those changes.
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There are net losses but you cannot charge off expenses to losses, only against profits.
 
petersonra said:
There are net losses but you cannot charge off expenses to losses, only against profits.
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I think what you are saying is taxable income when you have a net loss is zero and can't be a negative figure? That is when you are better off to try to apply those expenses against future tax periods where allowed because they won't give you funds in return just because your net income was a negative number.

Add you would get back any excess amount of tax you did pay in for that tax period though
 
kwired said:
I think what you are saying is taxable income when you have a net loss is zero and can't be a negative figure? That is when you are better off to try to apply those expenses against future tax periods where allowed because they won't give you funds in return just because your net income was a negative number.

Add you would get back any excess amount of tax you did pay in for that tax period though
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You can generally carry forward operating losses and charge them against future operating profits. But they are not going to give you money to make up for operating losses you may have encountered.
 
petersonra said:
You can generally carry forward operating losses and charge them against future operating profits. But they are not going to give you money to make up for operating losses you may have encountered.
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Don't give them any ideas!

One small nit, but losses carried forward go against income as expenses, not against profits.
 
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