The Section 105 medical reimbursement plan is a terrific tax-planning tool for the husband-and-wife business. But, as with any tax-reduction tactic, doing it right is critical.
Leo Stephens operated a grain harvesting business as a single-member LLC. He adopted a Section 105 medical reimbursement plan administered by AgriPlan/BizPlan. He hired his wife and paid her a $2,000 annual wage plus the benefits of the Section 105 plan.
Planning tip. Avoid payroll taxes! Use the Section 105 plan as the sole source ... Log in to view full article.