medical reimbursement

[oceanlovin'ea]

Client has been sole prop for years. Spouse is employed by client. Client set up medical reimbursement plan for spouse.

Now the client is beginning to show higher profits and is thinking about becoming an LLC, taxed as an S corp. Can client still have a medical reimbursement plan for spouse? I know that it would apply to all employees of company, but unlikely any others will be hired.Only employees would be self and spouse.

I wasn't entirely sure of the answer so thought I would check it out.

Thanks
Linda

[ChEAr$]

Once you cross that S corp line

Client has been sole prop for years. Spouse is employed by client. Client set up medical reimbursement plan for spouse.

Now the client is beginning to show higher profits and is thinking about becoming an LLC, taxed as an S corp. Can client still have a medical reimbursement plan for spouse? I know that it would apply to all employees of company, but unlikely any others will be hired.Only employees would be self and spouse.

I wasn't entirely sure of the answer so thought I would check it out.

Thanks
Linda

spouse is related and therefore by extension 2% shareholder. So you know what that
means.

[Gretel]

Client has been sole prop for years. Spouse is employed by client. Client set up medical reimbursement plan for spouse.

Now the client is beginning to show higher profits and is thinking about becoming an LLC, taxed as an S corp. Can client still have a medical reimbursement plan for spouse? I know that it would apply to all employees of company, but unlikely any others will be hired.Only employees would be self and spouse.

I wasn't entirely sure of the answer so thought I would check it out.

Thanks
Linda

HRA doesn't work for them any more. But how about HSA with high deductible Health ins? At least they would be able to deduct on front of 1040.