HRA Basics and Strategies | Mark J Kohler - YouTube

Have you heard of the health reimbursement arrangement or HRA if you have a lot of medical expenses

This is a strategy you've seriously got to consider it can help you get a tax write-off for all of your medical expenses

Up to a certain limit. Let's break it down

First let's talk about what an HRA isn't and then what it is

Well an HRA is not a health savings account that's like a supercharged IRA for health care love them

I have other videos on that check them out and you don't have to be a business owner and if you want to put money

Into this HSA you get a tax deduction. No AGI limits are wonderful, but an HRA is different

It's also not a flexible spending account that use-it-or-lose-it

Plan that might be your work and they put some money in it and you use it or lose it

That's an employee type plan a flexible spending account. The HRA is a plan for a small business owner

You've got to have a small business to use an HRA and then you can deduct medical expenses

inside your small business

And get a tax write-off upfront. That's pretty awesome. Now, I did state small business owners. That's right

You have to have a small business because the HRA is a health reimbursement arrangement

It's a plan and it's either for you or your family members that include their dependents and backdoor yourself in so there's a specific

Structure for it. If you have an S corporation, you can't generally have an HRA in your S corp

To help you and get it direct write-off

Now you can set up some HRA plans that help you at least get around FICA but I want more than that

So usually what I do is set up a sister company where the HRA is a deduction

inside of support company for your spouse if you're married and then their dependents, which is you

Read my book the tax and legal playbook. I have a whole section on this with diagrams

If you're single you can do the same thing

But you use a c-corporation and hire yourself out of your S corporation in a C Corp now, it sounds elaborate

But the point is if you can write off an extra 10 grand and medical expenses

Some of these little structural headaches are well worth it. So talk to your accountant look at the structure and

What type of business you have and that's really the first step?

I really find the break-even point

Where an HRA pays for itself is around four or five thousand dollars in medical expenses?

Because think about it if you can get an extra $5,000 write-off, you're in a twenty twenty-five percent tax bracket

That's about a thousand to two thousand dollars and tax savings

Well that pays for the headaches of kind of doing this now an HRA plan is something that you can implement yourself

We have an HRA document that you self maintained yourself. You don't have to have a bank involved or a health insurance company

It's it's self administered

We charge around four hundred bucks at our law firm and it includes a consultation with an attorney and then you're off to the races

And you can maintain it on your own but you want to look at the cost-benefit analysis

How much do you really have in medical? Are you gonna write off $5,000 or more? And it was good?

What's it gonna cost to maintain and once you figure that out, you can decide if an HRA is good for you

finally the HRA plan can be used in conjunction with a health savings account so you can have both and

So if you do it, right you can now start getting write-offs of close to

$15,000 or more in a family situation and

You can really get a lot of write-offs for your medical expenses that can generally be difficult to write off

Itemizing is not the way to go. And if you have a small business you want to look at your options here

So do your research?

Talk to your accountant

Give our law firm a call. We'd love to be of service

we don't have to be your accountant to help you get the plan implemented and then you're off to the races and

saving big money on those medical expenses

Thanks so much for watching that video and I want to be your source for tax and legal strategies

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