From Investment Season to Tax Season
It seemed like only a short while ago I was closing 2008 and welcoming in 2009 with some friends of mine – hard to believe how fast time flies. It is like the expression – time flies: you better be the pilot!
With the closing of 2008, naturally so does the wonderful experience of telling our government how much money we made last year so we can pay our taxes. Now I’m not against paying taxes – I just don’t want to pay more than my fair share!
With the topic of taxes in mind I wanted to start a short series describing an excellent tax saving strategy for self employed business owners – the Private Health Services Agreement (PHSA).
PHSA’s are best described as a tax saving strategy as opposed to a typical health insurance plan through Blue Cross, Manulife, or any of my other suppliers. The advantage is that there are no premiums and no waiting periods – for any services including crowns, bridges, dentures, and orthodontia!
Also more services are covered that typical insurance company plans won’t – such as MRI treatments, laser eye surgery, plastic surgery, and even over the counter drugs! Another feature is that there are no limits or caps imposed by the insurance company i.e. prescription glasses are covered up to $200 per 2 year period. You can spend as much as you like on these health and dental services!
In a nut shell – whatever medical and dental expenses you have – they will become 100% tax deductible expenses for your company – just like premiums for a traditional insurance plan. However, if you are like some people who rarely use their health plan – this can save you significant dollars on your monthly cash flow because you are not paying the premiums. Or if you already have coverage from your spouse and are looking to “top up” – this can provide you with a better alternative to purchasing individual health plans.
In the next parts I will discuss how this plan can work for a one-man operation (Joe the plumber) to a company with multiple employees. In the meantime if you have questions, contact me at any time!
Until then,
Rhett