The Biggest Medical Expense Deadline of the Year

Welcome everybody to a live tax and legal discussion. I want to save you big money. Talk about some very, very important tax law strategies and updates and deadlines. And this is your time to ask questions from a real tax lawyer. I am so grateful to be here with you. My name is Mark Kohler, cpa, attorney, best selling author, podcaster, blogger, been in the space now for 25 years, helping small business owners, main street business owners around America. And I just, this is my happy place. Glad to be here with you today. Now, if you have a question regarding the boi, that Business Owner Information Report that's been all over the map, or we're going to talk about healthcare and the biggest healthcare expense deadline coming up here this next week. If you have a question on either of those topics, please type it in down below. I'm going on multiple platforms. You may not see the other questions, but my studio producer here, Danan, is going to bring me those questions as they roll in. But let's get to it. First, a BOI update, the Business Owner Information Report. You've heard about this if you're a business owner. It's gotten a little old right back in December, we're oh, it's unconstitutional. You don't need to do it before year end. Then the fifth Circuit Court says, nope, it's good, you better do it. And we're going to say it's not unconstitutional. The temporary injunction, we're lifting that. And then it goes to another panel at the 5th Circuit and they go, nope, this needs to get looked at. It's unconstitutional. We're going to put that, please stop the insanity. And the federal government did. They said this has got to go to the Supreme Court. So they filed an emergency request for a hearing with the Supreme Court and asked for them to decide by January 10th. Now why are they in such a big hurry? Well, first of all, this law that's been on the books for three to four years required all business owners in America to report this information to FinCEN, the Financial Crimes Enforcement Network, the sister to the IRS said, we got a report by the end of the year or it's a $500 a day penalty for business owners. Big deal. And why are they doing this? To try to catch the human traffickers, the drug dealers, the money launderers, and who are abusing LLCs, not us. But they got to find them somehow. So I get it. But anyway, it's been going through the courts trying to figure out if this is a burden we want to put on business owners. Now here's what's going to happen? The federal government, who is going to have the Department of Justice gutted and changed with new leadership when President Trump takes office here later this month. They want this before the Supreme Court, before the new administration is in place. And they've asked the Supreme Court to deal with it. And they've said, we want two things. Either tell us, lift the injunction and let's get this done and just let it go through the court system. Maybe we'll say it's unconstitutional later, but you got to lift this injunction. We are ready to go. Millions of business owners have already filed. Let us finish the work or look at it. Look at it and tell us if it really is unconstitutional. Supreme Court, we gotta be done with this. There is a chance when President Trump gets into office, he may say, you know what? Department of justice, forget it. Don't pursue this appeal anymore. This is too burdensome for business owners. We're just going to let the Fifth Circuit ruling stay? We don't know. But the current Department of Justice wants this dealt with. So what do you do as a business owner? You can voluntarily still report. We're helping clients at our law firm and in Main Street Business Services file if they want to. We're giving business owners a choice. Do you want to file or not? A lot of business owners are like, are you charging me? No, we're not charging extra to do this. If you're part of our company maintenance system or we're setting up a new entity, we're just doing it for our clients anyway. And so many business owners are like, I don't want to hear about it anymore. I don't care about it. I'll voluntarily report. Go catch the bad guys. I want to help out anyway. Let's just be done with it. Other business owners are like, not on my life. I want the Supreme Court to tell me I've got to do this. And they're just going to be. You're going to be in a holding pattern until we find out. So right now, none of you have to report the ownership of your company. The address, who's in control, who's not. The. There's a variety of information that's only reported to the federal government. It's not public record. It is private. But a lot of people still don't like opening up their kimono and showing the federal government anything you don't have to report. You can wait until the Supreme Court deals with this. We are just days away. Is this really going to happen or not? So that's your update. Wait and see. Voluntarily report. It's your choice. If you have a question, type it down below. I'll do my best to answer it and look in that crystal ball and tell you what the Supreme Court's gonna do. We don't know. All right? Now, Justice Alito, I will say is a conservative justice and he is the one to decide if this is gonna go in junction or for entire review. We'll see what he does. All right, the second topic here is the big one that affects all of you, and that is the health care expenses in America are off the chart. It's the number one reason for bankruptcy. It's the number one reason why people pull money out of their retirement accounts and that is to pay for exorbitant medical costs. Do you get to write those costs off? Maybe, maybe not. It's a big deal. So there's two or three ways to write off your medical expenses. You get to write off your health insurance. If you're a business owner. If you're an employee and your health insurance is covered for you, your employer is writing it off. But if you've got extra medical expenses, copays, deductibles, eyes, dental, chiropractic, massage therapy, whatever, kidney dialysis, cancer treatments, whatever, if you've got medical expenses, it'd be nice if you could write them off, right? Well, itemizing is terrible. Not only is with the new SALT deduction, you can only write off, most people are taking the standard deduction and they're not even trying to write off their medical. Then it's limited by 7.5% of your AGI. Now I know that sounded like garbly goop to most of you, but what it means 97% of America's are not able to write off their medical expense on their 1040. So what do you do? You have two choices. You can do the health savings account or this FSAH strategy where it's kind of a use it or lose it or reimburse it yourself in your small business for medical expenses. That's another strategy for another day. The big deadline is January 15th. Just this next week is the deadline to choose your health insurance policy for 2025. If you want to do a health savings account, you've got to choose a high deductible plan by January 15th. If you're choosing a plan for 2025. Now, there are circumstances where you get to change your medical insurance throughout the year. And for many of you that have a day job with health insurance coverage for you during Your enrollment period, whether it's June, July or whatever, you can choose a high deductible plan. But if you're a business owner or you're not covered, you have until January 15th right now in the next week to choose a high deductible plan. Now what's this mean? Oh, my gosh, I love the Health Savings Account. The Health Savings Account is like a supercharged IRA for medical expenses. You get a tax deduction when you put money in. It grows tax free and you can pull it out tax free for any medical expense tomorrow. You don't have to wait till you're 59 and a half. Young people, this is huge. If you're going to have a baby, you can put money into hsa, have the hsa, pay for the birth of your baby and get a tax write off because you're going to have a big deductible if you go have a baby. If you have a big surgery coming up, if you have a lot of prescription drug medications, you can build this health Savings account tax free, put money in it and get a tax deduction no matter what your income level is and pull it out for medical. But you have to have a high deductible health insurance plan. Now this last year that level was $1,600 deductible if you're single or $3,200 if you were head of household or married. Now you may say, well, Mark, that's a huge deductible. Yeah, 80% of Americans don't even use their health insurance. They're paying for it and they're generally healthy. So get a higher deductible, a lower premium, get the qualifying plan and put that savings tax deductible in a health savings account. It grows for the rest of your life tax free. If you don't use it, it goes to your spouse. If they don't use it, it goes to the kids. It's an incredible. I think it's the best kept secret in healthcare strategy planning. Now, if you have a question about the Health Savings Account, getting health insurance, writing off your medical expenses, Mark, you're full of crap. I thought you could do it this way. Or what's the hra? Or what about the use it or lose it plan at my office at work. If you have any questions on medical, please type them down below. I want to give you a straight answer and I want you to save on your medical expenses there. It is terrible out there, what it can cost in medical care. And you should get a tax write off for it. Now, you don't have to be a business owner to have a hsa. You just have to have the high deductible plan. And the deadline for a plan for this year is January 15th. So you can go to healthcare.gov and I've done this for my kids, I've done it for family members, I've done it for myself. I go to healthcare.gov and I shop for health care plans and I buy one. Now you might get a subsidy if your income is of a certain level, but for the far majority of us, we don't get a subsidy. We just go choose our health insurance. Now there's about 10 to 15 states that have their own platform or exchange where you can go shop for health insurance. But the majority of all the states just go to healthcare.gov I'm in the state of Arizona, I go to healthcare.gov it's okay. And I can go choose the health insurance plan that's best for me or my family. So please deal with this. It is so, so, so important. Now again, if you have any questions, I want to start filling them here. If you have a question about the BOI or a question about health insurance, health care, healthcare expenses, I'm all yours. Dayden, what do we got going on?

What do you want to hear first? BOI or healthcare?

Well, what do we have? More, probably more healthcare. Should we hit a couple bois? Go ahead.

Let's get BOI out of the way. If this BOI does go through, does it apply at all to a dba?

No, it does not apply to a doing business as name registration. It doesn't apply to even a general partnership. It only applies if you file for an LLC or a corporation or a limited partnership. So if you filed for an entity with the state, the government wants to know who really owns this, who really controls it. Because there's a lot of bad people out there. We need to find them. That's why they're doing this. Now there are a few exceptions. They don't apply to 99% of us on Main Street America. So don't worry about it, just buck up and deal with it. But it's not for DBAs. Next question.

Next BOI related question. If someone has an anonymous trust, will it not be anonymous anymore?

Trusts are not required to file. And if you have an anonymous trust, it's going to stay anonymous. And by the way, if your LLC, we set up LLCs for privacy all the time so people can't go online and find you. That still works. Only the government knows who owns this LLC and who controls it. That's what they want to know. But it's still private. I can set you up in multiple states and hide the ownership of your company for privacy. I love it. I'm big on privacy. This is just the federal government. And by the way, they already see your freaking tax return. This is for the entity piece of your tax return. So it's not that you're losing privacy against bad people and scammers and your family or whoever you want to hide from. The government just wants to know this so they can go after the bad actors in our country.

Okay, one more BOI question for now, at least. Over on Instagram, we had a question of interesting hypothetical. So, what happens to my info, and I'm curious to hear what you think. What would happen to my entity if the government deems whatever I'm doing illegal or questionable?

Okay, well, by reporting under, the BOI has nothing to do what you're doing in your business. You don't even have to describe what your business is doing. You could be selling cupcakes. You could be a landscaper. You could be a dentist. They don't care. They just want to know who owns it, the address, and who controls it. That's it. Because so many bad actors are hiding behind LLCs, and no one knows who owns them. But you don't have to disclose what you're doing. That's point number one. Now, if the government decides that you're selling drugs or doing human trafficking in your llc, you're going to prison. I don't care if it's an llc, a corporation, or just you. The government's trying to find you. If you're a bad person, the government's out there looking for you. So you're the, you know, Denzel Washington and the enforcer. You know, they're looking for you. Dexter's got a hard target on your back, but I'm just saying this reporting has nothing to do about the purpose of your company. They just want to know who the hell owns it and runs it, and who's the manager, who's the president. Hope that helps answer your question.

Just don't do illegal stuff.

Don't. Yeah, don't do bad things. Bad things happen to bad people. All right, next question.

All right, so can I start now? Let's go into. Let's go into medical. Can I start my HSA today for 2025?

Okay. Can you start your HSA today for 2025? If you have a high deductible plan in order to do it today, you would have set up your health insurance by December 15th to be effective January 1st. So go get your policy, a high deductible plan which will be effective February 1st and then you can open your HSA February 1st. You cannot open a health savings account without the insurance. Now here's an important point everybody. Where you get your insurance may not be where you do your hsa. You could open up an hsa, our trust company and buy crypto in your hsa. You could go buy XRP in your HSA when it rolls and you're making money, you're not paying tax and you can pull it out for any medical expense. It's called a crypto HSA. You can do it. Directra.com I know Kirby, you're managing the post here and on different platforms. Please put the website for directra.com in the description in the chat of all of our platforms here. If you can help out too Dana. Because people, if you want to trade crypto or stock inside your hsa, you can do that. But you get your insurance over at Blue Cross Blue Shield or United or Denova or wherever. Go get your health insurance high deductible plan. It'll be effective February 1st and you go get your HSA wherever the hell you want it. Next question.

Cool question. I have had cancer and cannot get a high deductible plan. Can I still do an hsa?

That's interesting. I've never heard anybody say because of their medical condition they can't get a high deductible plan. What you might in pre existing conditions was part of the Affordable Care act or Obamacare that said you cannot be denied insurance due to a pre existing condition and you can still get a bronze silver plan, whatever and a high deductible or low deductible. That just seems I would just question that right out of the gate. Now I'm not a health insurance agent but I would just because you had. I've had some bad stuff health wise I can get a high deductible or low deductible, whatever and my preexisting condition, it might change my premium. But anyway I would look into that. Now let's assume you're correct. You could not get a high deductible plan for whatever reason. Then you can't have an hsa. I'm sorry but I've never heard of that. And I've been doing this now for with the HSA planning for over 10 years. So do some more research Whoever's telling you that, go hard. And I would love me to prove you wrong because I want you to have an HSA if possible. So let's work on that. So thank you for that question. Next question, Dana, next question.

Can I make only one LLC for my self directed HSA and self directed education savings account?

No, you can do multiple. Can we go whiteboard for a minute just for fun? I know, I'm putting in my. Oh, wow, look at you, Dana, doing such a good job today. So what I teach is called the trifecta. What I want all my Americans to do is build a trifecta. Down here is your revocable living trust and your 1040 tax return. All your money flows downhill and all of you, young or old, rich or poor, should have a revocable living trust. Estate planning is super important. 50% of Americans don't even have a will. And a revocable living trust goes with a will. Alright, now the next step is we put your operations over here and your assets over here. Over here you might have a 401K. That's a bucket. Over here you might have an IRA. That's a bucket. And then over here you might have a health savings account. You might have a Roth ira. These are all different investment accounts. Your home will be owned by your trust. Over here is your LLC for your side hustle and for those of you that have a main hustle and you're making money, you're going to be an S corporation and you might even graduate to the S Corp. So all we're going to be taking tax strategies. You're going to have income, you're going to have multiple businesses. I love it. And over here you might have rental property. See how this starts to come together, people. Well, in hsa, let's just zoom in on this hsa. Here, fix my pen. If I can zoom in on this my HSA bucket, I can take it. Sorry everybody. There's my hsa. My HSA could open an llc. It could buy crypto, it could buy stock, it could invest in a small business, it could invest in a syndication. Now, this year you're able to put $8,550 in it. You have until April 15th to put in $8,300 for last year. If you had a high deductible plan last year, you can still put that money in for last year. That's pretty cool. So next year in 2025, you can put in 8,500. Well, you say well, Mark, I can't go out and do a lot of business with 8,500. I know, but if you put in 8,500 this year and next year or maybe for last year, all of a sudden you might have 10 to $20,000. Oh, I'm gonna go buy some Tesla stock. I'm gonna go buy some bitcoin. I'm gonna go buy some xrp. Maybe I'm gonna go invest in a new startup. And all of a sudden it triples in value. Now you have 30 grand. Oh, and I put in another $8,000 the year after that. Guys, within four or five years, you could easily have $50,000 in here by investing in what you know best. So if you want to get over to directed ira.com, you can open up an HSA and start investing it in what you know best. And it's not a get rich quick scheme. I love a get rich slow scheme because it's legit. It works. So your HSA can start investing in all these things, all these things your HSA can invest in, and you fill the tank like Monopoly. Every year you pass go, you pass go, you put in another seven grand, another eight grand, another nine grand, and all of a sudden, tax free, you've got a tax free ATM for your medical expenses for the rest of your freaking life. Pen drop. All right, next question.

All right, last question here is how does, how does the HSA work as far as inheritance with my children after I die?

Okay, so with your hsa, I'll just say this. I won't diagram. Your Health Savings Account grows. Let's say you're married and you pass away. Your spouse gets your hsa. You get to choose, but your spouse typically would get it. And then maybe you're single or your spouse dies, then it goes to the kids, and they. Their HSA goes into their ira. It's like an inherited ira. And then they can pull it out for retirement for themselves. Currently, under the tax law, your HSA goes to your spouse's hsa, but when you both die, it goes to your kids ira. And you get to choose who the beneficiaries are. You may say, it's not my kids. I want it to go someone else. I wanted to go to my brother or my sister or wherever. But it's an asset of yours that never goes away. You get to choose a beneficiary for your ira, your hsa, which turns into an IRA for them. Everybody, this is legit. It's for real. The Health Savings Account is one of the best kept secrets in America. This is a chapter in my book, the Tax and Legal Playbook. You can get it on Amazon. Hundreds of five star reviews. You I've got podcasts on this. My YouTube channel is full of HSA videos. Please do a little research on this. I'm not kidding. This is one of my top 10 tax strategies for every American and it is absolutely not talked about enough. And again in the next week, you've got to choose your insurance for the year. And if you have insurance at work, go to work and go, hey, can I convert this over to a high deductible plan? I want an HSA plan. You might be able to change it tomorrow. I don't know. Get doing some research on your fact pattern, what's going on in your life. And I hope you can make a bunch of money tax free in your hsa. Thanks so much. Have an awesome day.