Well the debt ceiling has been raised and World Disaster has been averted (again-at least until tomorrow). Today the Senate passed the compromised bill and the President signed it, so now what will we talk about? My main question is why did it take until the last minute to get a compromise through? Why wasn’t this done last month (or six months ago)? Because life is a movie and it never pays to get something until the last minute because then people will stop watching.
Brian’s Tax Musings
Hey if you are self employed, you can deduct your spouse’s medical insurance and medical expenses on your Schedule C and save some itemized deductions. Setting up a Section 105 Medical Reimbursement Plan for your employees allows you to deduct them on the front of your return rather than as a medical expense on Schedule A. You also can reduce your self employment tax by the expenses, but your spouse has to take a salary which will probably wipe out most of those savings. Obviously if you have employees, you have to let them participate in this plan also. It can take some planning to get this right so you can save the max on this.
Brian’s Tax Musings
If you have had a fire at your home or an auto accident, you may be able to take a casualty loss deduction on your taxes. Casualty losses apply to personal property – if the property is completely destroyed the loss is the adjusted basis in the property less insurance reimbursement; if the property is only partially destroyed then the loss is the lesser of adjusted basis of property or loss of fair market value of property less insurance reimbursement. The loss is taken as an itemized deduction and has to be reduced by $100 per casualty and then 10% of your adjusted gross income. You also have to file form 4684. If you can get through all that, you have a casulaty loss; of course you have to be able to use schedule A, or you have to still take the standard deduction and lose any additional loss.Here is a link to the IRS rules on casualty losses:http://www.irs.gov/taxtopics/tc515.html