Victor Roberts wrote:

- quote -

I would say that's not the issue--rather, the issue is going
to be whether your compensation, taken as a whole (which
includes the medical reimbursement), is reasonable. The IRC
itself imposes no direct limitation on how generous an
employer can be in this area, so long as the employer
doesn't discriminate.

However, there is always the overriding issue of whether the
compensation was reasonable for the services obtained and,
potentially, whether you truly were an employee (considering
this a benefit that is to be offered to employees).

--
Ed Zollars, CPA
Phoenix, Arizona

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pwcpa[at]wf.net (Chuck Warman) wrote:

- quote -

Does your wife's medical reimbursement plan set any limits
for reimbursement of medical expenses? When I set up my C
Corp my accountant suggested that the IRS would be
uncomfortable with a plan that did not set a limit on
medical reimbursements. He suggested my annual salary as a
reasonable limit. So, the written plan states "amounts up to
the employee's annual salary". Is this more conservative
than necessary?

--
Vic Roberts

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oracledba9[at]e-mailanywhere.com (Alan Tukov) wrote:

- quote -

My opinion: It might make you slightly more likely to be
audited, but so what? It's perfectly legit. My wife is my
only employee, and I've been reimbursing 100% of her (our)
medical expenses for years. Just be sure you have a written
plan.

Chuck
Charles P. Warman, CPA
Wichita Falls, TX

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Newsgroups: misc.taxes.moderated

I have a C Corporation. It grossed about $85,000 in 2003.
The corporation reimburses all medical expenses for all
employees (currently only one employee, me). I had about
$8000 of medical expenses in 2003. Would taking an $8000
medical expense on my 1120 seem excessive?

I have all receipts, but don't want IRS trouble.

One acccountant suggested maybe taking a $6000 expense and
showing the other $2000 in schedule M-1 of 1120 (to indicate
that I'd not taken all $8000).

Any ideas or opinions???? (Most of the revenue will go to
my salary, with some to a profit sharing plan).

Thanks.

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