Month of February, 2007

I love the Medical Reimbursement plans. These work only for Sole Proprietorships (or LLCs taxed as Sole Proprietorships) and C Corporations.

They differ from a “Cafeteria Plan” that allows you to put money aside before taxes from your pay check. The Medical Reimbursement plan allows you to reimburse for medical expenses as you incur them.

A recent court case denied the deduction for a Sole Proprietorship. What did he do wrong? And, even more importantly, how can you make sure you don’t make the same mistake?