Self-insured medical plans can provide benefits for owners
Article Abstract:
The tax treatment of medical benefits depends on whether they are received by self-employed taxpayers or by employees. For self-employeds, the taxation of such benefits is further determined by the type of the medical plan, whether an 'accident or health insurance' plan or a Section 105(e) 'accident or health' plan, and by the type of the organization providing the insurance coverage. Health insurance coverage bought by self-employeds through a business is classified as a personal expense and cannot be deducted as a business expenditure. The medical benefits of self-employed individuals associated with partnerships or S corporations are treated as if these taxpayers were partners. The taxation of benefits for sole proprietors or sole S corporation shareholders is quite different since, unlike in partnerships, the risk of loss is borne by a single individual.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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Overpaid mortgage interest refunds are usually taxable
Article Abstract:
The proliferation of adjustable rate mortgages in the 1980s and on into the 1990s has led to a greater probability of error in the computation of interest due. Taxpayers who receive reimbursements for any overpayments made on ARMs need to be aware of the tax consequences of such reimbursements and any interest paid by the lender to the holder of the mortgage. The IRS regulations covering such situations involving ARM overpayments are stated in Revenue Ruling 92-91, which clarifies the application of the provisions of Section 163(h)(3) with respect to the deductions of reimbursements as qualified residence interest. In addition, new Proposed Regulations on the reporting requirements for financial institutions have also been issued.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1993
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