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June 1, 2019
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How do I expense funds paid to employees using a section 105 medical reimbursement plan for my spouse?

  • June 1, 2019
  • 3 replies
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Do I list the expense of my spouse's Section 105 medical and health insurance reimbursements on my Schedule C? Do I need a separate tax form to report this?

Best answer by TaxGuyBill

For income tax purposes, it just goes on Schedule C.  An "employee benefit program" on Line 14 makes most sense to me.

However, I think that is defined as a "self insured" health insurance policy.  That means you also need to file Form 720 to pay the "excise tax".  Don't worry the "excise tax" is less than $3 per employee.  It is the first item under Part 2 (page 2) on Form 720.

However, TurboTax does not do that form, so you will need to manually do it.  The date date was July 31st, so get it in soon.

https://www.irs.gov/instructions/i720/ch02.html#d0e1400

https://www.irs.gov/pub/irs-pdf/f720.pdf

https://www.irs.gov/pub/irs-pdf/i720.pdf

3 replies

June 1, 2019
Can you clarify the word "employees"?  Is your spouse your only employee, or do you have other employees?
drbrownAuthor
June 1, 2019
We have set up a Section 105 Plan with my spouse as the only employee.
June 1, 2019

For income tax purposes, it just goes on Schedule C.  An "employee benefit program" on Line 14 makes most sense to me.

However, I think that is defined as a "self insured" health insurance policy.  That means you also need to file Form 720 to pay the "excise tax".  Don't worry the "excise tax" is less than $3 per employee.  It is the first item under Part 2 (page 2) on Form 720.

However, TurboTax does not do that form, so you will need to manually do it.  The date date was July 31st, so get it in soon.

https://www.irs.gov/instructions/i720/ch02.html#d0e1400

https://www.irs.gov/pub/irs-pdf/f720.pdf

https://www.irs.gov/pub/irs-pdf/i720.pdf