Medical Insurance Deduction for Business Owners

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A lot of my clients start off with a small business that one person works while the spouse still has a full time job. That all leads up to a frequently missed deduction when it comes to medical insurance. In this case, the spouse has a job with medical insurance but has pay withheld to cover extra family members on the insurance policy.

The extra withholding for medical insurance from the spouse’s paycheck is a deduction for the business. The best way to handle the deduction is to have the business write a check monthly to reimburse for the expense. That deduction is then clearly on the books of the business and it’s a deduction on the tax return later!

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