WAY Off Topic: some tax advice?

Discussion in 'SolidWorks' started by Sporkman, Jun 25, 2003.

  1. Sporkman

    Sporkman Guest

    Dang, I hate to do it, but youse guys are one of the best advice
    resources a body could have. I've kept up with tax laws regarding the
    self-employed for a couple of years now, but I've fallen behind in
    understanding of how new regulations affect the "permanently" employed.
    Now I'm mulling over taking a "direct" position with a small consulting
    company, but I'd still have to pay my own medical insurace premiums . .
    .. at least for a while. If I contract with them I know I can continue
    to take a huge deduction for the premiums (premiums close to $12,000 per
    year for my family and me). But if I go direct I THINK the deduction
    disappears. Am I right?

    Fiscally yours,
    'Sporky'
     
    Sporkman, Jun 25, 2003
    #1
  2. Sporkman

    Michael Guest

    I believe you're correct about the deduction going away if you're not
    "self-employed", but there are at least a couple work-arounds for it...

    1) you (presumably) have a company... as long as you maintain the existence
    of that company, it can continue to pay your premiums. If the company had
    $15k in revenue, and $12k in insurance expenses, the IRS isn't going to care
    that your "salary" is nearly non-existent. They start to get antsy if you
    don't show a nominal profit tho. In short--a side job or two every once in
    a while would get you a big fat deduction. Assuming you had a reasonable
    amount of revenue already in '03, you are probably OK for the rest of the
    year....

    2) the company you go to work for can offer a "Medical Reimbursement
    Account" (mine does). This allows you to designate an amount from your
    salary (on a yearly basis) that can be used, on a pre-tax basis, to pay
    medical expenses. There is also a child care variant on this. If this is
    available to you, you designate an amount equal to your expected premiums,
    and pay them with pre-tax dollars, which is functionally equivalent to
    getting a deduction.
     
    Michael, Jun 25, 2003
    #2
  3. Sporkman

    Sporkman Guest

    Of course, of course, I realize you're right. Yeh, I have a company and
    it does show income so #1 is how I'll handle it. I should have
    realized. Thanks very much for the reply.

    Best regards,
    Mark 'Sporky' Stapleton
    Charlotte, NC
     
    Sporkman, Jun 26, 2003
    #3
  4. Sporkman

    Sporkman Guest

    Looks like a worthwhile read, Cliff. Thank you (on behalf of all of
    us).

    Mark
     
    Sporkman, Jun 26, 2003
    #4
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