Itemized deductions are an optional deduction taxpayers can take on tax returns for things such as medical expenses, property taxes, mortgage interest, and charitable contributions.
When examining whether an HRA is appropriate for a sole proprietor, it’s important to look at cash flow, not just the pure tax savings.
Are HRAs always appropriate for sole proprietors? An HRA will almost always save on taxes, but maybe not as much as advertised.
Are HRAs always appropriate for sole proprietors? Usually, but not always.
I like to say that there are two types of dependents in the tax world: a “dependent dependent” and a “medical dependent.” A “dependent dependent” is someone who you claim as a dependent on your tax return. (Note that the “dependent dependent” terminology is something I made up; it’s not intended to be a technical […]
In the tax world, the term “HSA” stands for “health savings account.” An HSA allows you to save money, tax-advantaged, for medical expenses. Contributions to an HSA reduce your taxable income, and withdrawals from an HSA are tax-free if used for medical expenses. Requirements To qualify for an HSA, the basic requirements are: You must […]
If your small business has an Health Reimbursement Arrangement (HRA), you probably owe a $1/employee fee because of the Affordable Care Act.
People in same-sex relationships know that if a same-sex partner is not a dependent, then the value of health benefits provided to that partner are taxable income. Some of my clients in same-sex relationships have upwards of $10,000 of “income” added to their W-2s because they have a partner on their health insurance. But most […]
DISCLAIMER: The answers to questions in this segment are intended to be general in nature and do NOT constitute tax advice. Please contact a tax advisor to discuss your unique situation. All of these questions have been submitted from readers recently: Q: Can I file as head of household on my taxes in North Carolina if […]
The IRS has released the mileage rates for 2012. The rates are the same as they were for the last half of 2011: Business mileage rate is 55.5 cents/mile. Medical mileage rate is 23 cents/mile Moving expense rate is also 23 cents/mile Charitable mileage rate is 14 cents/mile* *-Unlike the mileage rates for business, medical […]