FHB Logo Facebook LinkedIn Email Pinterest Twitter X Instagram Tiktok YouTube Plus Icon Close Icon Navigation Search Icon Navigation Search Icon Arrow Down Icon Video Guide Icon Article Guide Icon Modal Close Icon Guide Search Icon Skip to content
Subscribe
Log In
  • How-To
  • Design
  • Tools & Materials
  • Restoration
  • Videos
  • Blogs
  • Forum
  • Magazine
  • Members
  • FHB House
  • Podcast
Log In

Discussion Forum

Discussion Forum

Med Ins deduction BEFORE taxes withheld

PatchogPhil | Posted in Business on February 6, 2009 04:58am

What does a small business (4 employees) have to do, so that they can deduct employee cost of medical insurance from gross pay BEFORE tax withholdings are calculated?

Some kind of paperwork must be filed and to somewhere (state and/or FEDs)?

 

Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?

Reply
  • X
  • facebook
  • linkedin
  • pinterest
  • email
  • add to favorites Log in or Sign up to save your favorite articles

Replies

  1. User avater
    BillHartmann | Feb 06, 2009 05:30am | #1

    Look at circular E and see if it mentions it.

    I am not sure if anything has to be filed.

    But there might be regulators on what types of "medical" insurance can be deducted.

    And with a small company there are rules for requiring "equal treatment" that need to be followed.

    But this is something that you need to pass by a local expert. Find a CPA that is familar with employee benefits.

    And talk to your insurance salesman. Now I would not take his word for anything about this. But he might have some information or might be able to point you to local experts.

    .
    William the Geezer, the sequel to Billy the Kid - Shoe
  2. Hiker | Feb 06, 2009 05:34am | #2

    Phil,

    I went through this about two years ago and what it turned out to be was that I needed to certify that the company was eligible to deduct before taxes.  My insurance broker sent me some document, I signed it  and put it in my files.  That was it.  My CPA made it sound like I needed an act of congress-not so.  Call your HI broker and have them generate the letter. 

    Bruce

    1. PatchogPhil | Feb 06, 2009 05:52am | #3

      What makes your company eligible? Or NOT eligible? 

      Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?

      1. Hiker | Feb 06, 2009 07:23pm | #4

        This was where I placed a little blind faith in my broker.  They said since we offered insurance to everyone we were eligible and the "form" was a self certifying letter stating we believed we were eligible.  I got very frustrated because my CPA said I need the "certification" but had no idea on how I could get it. 

        Bruce

        1. User avater
          BillHartmann | Feb 06, 2009 07:37pm | #5

          "They said since we offered insurance to everyone we were eligible "This is were it gets trickly.I don't know about insurance, but with retirement plans they you have to be able to show that they are non-discriminatory and don't favor owners. And that is based who SIGNS UP. Not just "offered"..
          William the Geezer, the sequel to Billy the Kid - Shoe

  3. Rebeccah | Feb 06, 2009 09:00pm | #6

    The term to search for in your google searches is "Cafeteria Plan"
    You can have a cafeteria plan that contains only health insurance -- it's called a premium only plan (POP Plan).

    http://www.irs.gov/govt/fslg/article/0,,id=112720,00.html
    http://www.physiciansnews.com/finance/1096.html
    http://www.qbalance.com/Do-it-yourself-cafeteria-plan.htm

    Note: The IRS page above is confusing as heck. The Physicians News page is less so, though it doesn't include all of the details that you need. The last page includes a link to software you can rent or buy to administer a cafeteria plan yourself. I've never used it, can't say if it's any good or not, but it's aparently been around since DOS days in the late 80's.

    Rebeccah

    1. Hiker | Feb 06, 2009 10:08pm | #7

      Thank you Rebeccah,

       

      That what we have is a POP plan.

      Bruce

      1. PatchogPhil | Feb 07, 2009 06:32pm | #8

        Thank you for all the replies.

         

          

        Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?

        1. marv | Feb 07, 2009 07:07pm | #9

          Call your insurance man and ask him for help setting up a cafeteria plan.  You wont be able to set it up yourelf.You get out of life what you put into it......minus taxes.

          Marv

  4. frenchy | Feb 07, 2009 08:10pm | #10

    Have your company set up a cafeteria plan whereby the cost of tax deductable items are set into a fund and a check written without taxes.. Owners love those plans because they avoid paying witholding and social security costs and save themselves money in the process.

Log in or create an account to post a comment.

Sign up Log in

Become a member and get full access to FineHomebuilding.com

Video Shorts

Categories

  • Business
  • Code Questions
  • Construction Techniques
  • Energy, Heating & Insulation
  • General Discussion
  • Help/Work Wanted
  • Photo Gallery
  • Reader Classified
  • Tools for Home Building

Discussion Forum

Recent Posts and Replies

  • |
  • |
  • |
  • |
  • |
  • |
View More Create Post

Up Next

Video Shorts

Featured Story

Old House Air-Sealing Basics

Look high and low to find and plug air leaks that cost you money and comfort.

Featured Video

How to Install Exterior Window Trim

Learn how to measure, cut, and build window casing made of cellular PVC, solid wood, poly-ash boards, or any common molding material. Plus, get tips for a clean and solid installation.

Related Stories

  • A Classic Paint Sprayer Gets a Thoughtful Refresh
  • Podcast Episode 692: Introduction to Trade Work, Embodied Carbon, and Envelope Improvements
  • FHB Podcast Segment: Embodied Greenhouse Gas Emissions and the Building Codes
  • Old Boots Learn New Tricks

Highlights

Fine Homebuilding All Access
Fine Homebuilding Podcast
Tool Tech
Plus, get an extra 20% off with code GIFT20

"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Fine Homebuilding Magazine

  • Issue 332 - July 2025
    • Custom Built-ins With Job-Site Tools
    • Fight House Fires Through Design
    • Making the Move to Multifamily
  • Issue 331 - June 2025
    • A More Resilient Roof
    • Tool Test: You Need a Drywall Sander
    • Ducted vs. Ductless Heat Pumps
  • Issue 330 - April/May 2025
    • Deck Details for Durability
    • FAQs on HPWHs
    • 10 Tips for a Long-Lasting Paint Job
  • Issue 329 - Feb/Mar 2025
    • Smart Foundation for a Small Addition
    • A Kominka Comes West
    • Making Small Kitchens Work
  • Issue 328 - Dec/Jan 2025
    • How a Pro Replaces Columns
    • Passive House 3.0
    • Tool Test: Compact Line Lasers

Fine Home Building

Newsletter Sign-up

  • Fine Homebuilding

    Home building tips, offers, and expert advice in your inbox.

  • Green Building Advisor

    Building science and energy efficiency advice, plus special offers, in your inbox.

  • Old House Journal

    Repair, renovation, and restoration tips, plus special offers, in your inbox.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters

Follow

  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X
  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X

Membership & Magazine

  • Online Archive
  • Start Free Trial
  • Magazine Subscription
  • Magazine Renewal
  • Gift a Subscription
  • Customer Support
  • Privacy Preferences
  • About
  • Contact
  • Advertise
  • Careers
  • Terms of Use
  • Site Map
  • Do not sell or share my information
  • Privacy Policy
  • Accessibility
  • California Privacy Rights

© 2025 Active Interest Media. All rights reserved.

Fine Homebuilding receives a commission for items purchased through links on this site, including Amazon Associates and other affiliate advertising programs.

  • Home Group
  • Antique Trader
  • Arts & Crafts Homes
  • Bank Note Reporter
  • Cabin Life
  • Cuisine at Home
  • Fine Gardening
  • Fine Woodworking
  • Green Building Advisor
  • Garden Gate
  • Horticulture
  • Keep Craft Alive
  • Log Home Living
  • Military Trader/Vehicles
  • Numismatic News
  • Numismaster
  • Old Cars Weekly
  • Old House Journal
  • Period Homes
  • Popular Woodworking
  • Script
  • ShopNotes
  • Sports Collectors Digest
  • Threads
  • Timber Home Living
  • Traditional Building
  • Woodsmith
  • World Coin News
  • Writer's Digest
Active Interest Media logo
X
X
This is a dialog window which overlays the main content of the page. The modal window is a 'site map' of the most critical areas of the site. Pressing the Escape (ESC) button will close the modal and bring you back to where you were on the page.

Main Menu

  • How-To
  • Design
  • Tools & Materials
  • Video
  • Blogs
  • Forum
  • Project Guides
  • Reader Projects
  • Magazine
  • Members
  • FHB House

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Popular Topics

  • Kitchens
  • Business
  • Bedrooms
  • Roofs
  • Architecture and Design
  • Green Building
  • Decks
  • Framing
  • Safety
  • Remodeling
  • Bathrooms
  • Windows
  • Tilework
  • Ceilings
  • HVAC

Magazine

  • Current Issue
  • Past Issues
  • Magazine Index
  • Subscribe
  • Online Archive
  • Author Guidelines

All Access

  • Member Home
  • Start Free Trial
  • Gift Membership

Online Learning

  • Courses
  • Project Guides
  • Reader Projects
  • Podcast

More

  • FHB Ambassadors
  • FHB House
  • Customer Support

Account

  • Log In
  • Join

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Follow

  • X
  • YouTube
  • instagram
  • facebook
  • pinterest
  • Tiktok

Join All Access

Become a member and get instant access to thousands of videos, how-tos, tool reviews, and design features.

Start Your Free Trial

Subscribe

FHB Magazine

Start your subscription today and save up to 70%

Subscribe

Enjoy unlimited access to Fine Homebuilding. Join Now

Already a member? Log in

We hope you’ve enjoyed your free articles. To keep reading, become a member today.

Get complete site access to expert advice, how-to videos, Code Check, and more, plus the print magazine.

Start your FREE trial

Already a member? Log in

Privacy Policy Update

We use cookies, pixels, script and other tracking technologies to analyze and improve our service, to improve and personalize content, and for advertising to you. We also share information about your use of our site with third-party social media, advertising and analytics partners. You can view our Privacy Policy here and our Terms of Use here.

Cookies

Analytics

These cookies help us track site metrics to improve our sites and provide a better user experience.

Advertising/Social Media

These cookies are used to serve advertisements aligned with your interests.

Essential

These cookies are required to provide basic functions like page navigation and access to secure areas of the website.

Delete My Data

Delete all cookies and associated data