Here’s how smart contractors are using medical plans to save thousands in taxes before year-end 👇

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🔹 𝟭. 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟬𝟱 𝗛𝗥𝗔 (𝗛𝗲𝗮𝗹𝘁𝗵 𝗥𝗲𝗶𝗺𝗯𝘂𝗿𝘀𝗲𝗺𝗲𝗻𝘁 𝗔𝗿𝗿𝗮𝗻𝗴𝗲𝗺𝗲𝗻𝘁)

If you’re a 𝘀𝗼𝗹𝗼 𝗼𝗽𝗲𝗿𝗮𝘁𝗼𝗿 or your 𝘀𝗽𝗼𝘂𝘀𝗲 𝘄𝗼𝗿𝗸𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀, you can set up a 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟭𝟬𝟱 𝗛𝗥𝗔.

It lets your business reimburse your family’s medical expenses, everything from premiums to prescriptions, 𝟭𝟬𝟬% 𝘁𝗮𝘅-𝗳𝗿𝗲𝗲 to you and 𝗳𝘂𝗹𝗹𝘆 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗯𝗹𝗲 to the business.

• Just make sure the reimbursements happen 𝗯𝗲𝗳𝗼𝗿𝗲 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟯𝟭 to count for 2025.

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🔹 𝟮. 𝗤𝗦𝗘𝗛𝗥𝗔 (𝗤𝘂𝗮𝗹𝗶𝗳𝗶𝗲𝗱 𝗦𝗺𝗮𝗹𝗹 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗿 𝗛𝗥𝗔)

If you’ve got a small crew (under 50 employees) and want to help with health costs without setting up a group plan, the 𝗤𝗦𝗘𝗛𝗥𝗔 is a great fit.

For 2025, you can reimburse up to:

• $𝟲,𝟯𝟱𝟬 for self-only coverage

• $𝟭𝟮,𝟴𝟬𝟬 for family coverage

Your business gets a deduction, and your employees 𝗱𝗼𝗻’𝘁 𝗽𝗮𝘆 𝗶𝗻𝗰𝗼𝗺𝗲 𝗼𝗿 𝗽𝗮𝘆𝗿𝗼𝗹𝗹 𝘁𝗮𝘅𝗲𝘀 on the benefit.

(Just be sure to send the written notice to employees, even if you’re late, the penalty’s only $50 per head.)

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🔹 𝟯. 𝗜𝗖𝗛𝗥𝗔 (𝗜𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗖𝗼𝘃𝗲𝗿𝗮𝗴𝗲 𝗛𝗥𝗔)

A newer option that’s becoming popular: the 𝗜𝗖𝗛𝗥𝗔.

It works for 𝗮𝗻𝘆 𝘀𝗶𝘇𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀, and lets you reimburse employees for 𝘁𝗵𝗲𝗶𝗿 𝗼𝘄𝗻 𝗶𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗵𝗲𝗮𝗹𝘁𝗵 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 instead of running a group plan.

It’s flexible and can save a ton on administration costs compared to traditional group health insurance.

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🔹 𝟰. 𝗦 𝗖𝗼𝗿𝗽 𝗢𝘄𝗻𝗲𝗿𝘀 — 𝗗𝗼𝗻’𝘁 𝗠𝗶𝘀𝘀 𝗧𝗵𝗶𝘀

If you’re paying for health insurance personally but operating as an 𝗦 𝗰𝗼𝗿𝗽, don’t forget these two steps before December 31:

1. Have your 𝗦 𝗰𝗼𝗿𝗽 𝗽𝗮𝘆 𝗼𝗿 𝗿𝗲𝗶𝗺𝗯𝘂𝗿𝘀𝗲 the premiums, and

2. Make sure the cost is 𝗿𝗲𝗽𝗼𝗿𝘁𝗲𝗱 𝗼𝗻 𝘆𝗼𝘂𝗿 𝗪-𝟮.

That allows you to claim the 𝗮𝗯𝗼𝘃𝗲-𝘁𝗵𝗲-𝗹𝗶𝗻𝗲 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 on your 1040, skipping the 7.5% AGI limit on itemized deductions.

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🔹 𝟱. 𝗦𝗺𝗮𝗹𝗹 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗛𝗲𝗮𝗹𝘁𝗵 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗧𝗮𝘅 𝗖𝗿𝗲𝗱𝗶𝘁

If you offer group health insurance to your team, you may qualify for the 𝟱𝟬% 𝘀𝗺𝗮𝗹𝗹 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗵𝗲𝗮𝗹𝘁𝗵 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝘁𝗮𝘅 𝗰𝗿𝗲𝗱𝗶𝘁, good for 2025 and 2026.

To qualify:

• Cover at least 𝟱𝟬% 𝗼𝗳 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲-𝗼𝗻𝗹𝘆 𝗽𝗿𝗲𝗺𝗶𝘂𝗺𝘀, and

• Have fewer than 𝟮𝟱 𝗳𝘂𝗹𝗹-𝘁𝗶𝗺𝗲 𝗲𝗾𝘂𝗶𝘃𝗮𝗹𝗲𝗻𝘁 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 with average wages under $𝟮𝟱𝗞.

That’s real money — and worth looking at if you’ve been on the fence about offering coverage.