By month: February 2011
The newly enacted tax cut creates a new 2011 and 2012 estate tax. The new rules are taxpayer friendly in two respects. First, they are easy to understand. Second, they contain a $5 million exclusion (portable, if properly elected, for husband and wife, giving a married couple an exclusion of $10 million).
Tax law gives choices to the executors who are handling the estates of those who died in 2010. Choice one is to apply the 2010 rules. Choice two is to apply the newly enacted 2011 and 2012 estate tax rules.
Tax law creates trouble for selected fringe benefits that the S corporation gives to a more than 2 percent shareholder. The loss of benefits and accompanying complications are factors to consider in the selection of the S corporation as your choice of business entity.
As a business owner, you should have your health insurance in a tax-advantaged position. If it is not possible or practical to utilize the Section 105 medical reimbursement plan, consider the health savings account.
Here is the big picture on how the health savings account (HSA) works for the proprietor, S corporation owner, and C corporation owner. The good news is threefold: (1) the tax deduction for the high-deductible insurance, (2) the tax deduction for the HSA investment account, and (3) the tax-deferral and tax-free use of the HSA investment account.
You need time and rate of investment return on your side to make your HSA investment grow to your satisfaction. One consideration for a higher rate of return is a self-directed HSA that allows you to invest in individual stocks, real estate, and mortgages.
You need to strategize your purchase of high-deductible insurance to maximize your HSA tax-favored investment portfolio.
The health savings account (HSA) offers the opportunity to save on insurance costs and create an investment nest egg. To learn how the HSA could work for you, do some easy arithmetic, like we show you in this article.