One advantage a sole proprietor has over an S corp is that they can set up a medical reimbursement plan for their employee(s). If their only employee is their spouse, the medical expenses of the family could become a business deduction. Of course, the medical reimbursement plan must be in writing.
My question is: Is it necessary to go through a company who furnishes the Section 105 plans? It might be a better option for some, but is it a NECESSITY? Does IRS code state that it HAS to be through one of these companies?

Second question: What if sole prop has 2 employees? one is wife, who does administrative work part time and one is a part-time worker in the field with him. Is there any way to write the plan so that the wife is covered but not the other worker?


Linda, EA