Write-Off Your Insurance Premiums - The Power of the HSA

Health savings accounts. Let me explain it this way, alright? So when it comes to health care, your insurance premiums as a small business owner are always a write off. Maybe I should mention that for a moment. How you would write it off. Here's your trifecta. Down here is your Trust and your 1040. If you are paying for your own health insurance premiums, if you have an llc, maybe a side hustle, we would pay for those insurance premiums right here. So health insurance. Now if you have an S corporation or you took your LLC and converted it to an S corp, which means you're taking a little W2, you're going to make sure the corporation pays for the health insurance premiums. Either company can pay for it. So whether you have a side hustle or an S corp, let your health insurance premiums get paid for here. If you pay a form out of your pocket under audit, the IRS will not allow that write off. It's really a big deal. Now if you have an S corp and you're taking your W2, you're going to list the amount of the insurance premiums on a box in a box on your W2. So it'll be listed up here. That's very important. If you have rental property and just an LLC over here, you cannot write off health insurance premiums because it's passive income. So health insurance premiums are not a write off. So if you have a small business that's operational, we're going to write off health insurance premiums all day long. The next topic is, well, what about health insurance costs? Co pays deductibles, dental acupuncture, massage therapy, prescription drugs, drug rehab. I mean the list goes on and on. There's a lot of medical expenses that could be tax deductible. Now some of you may be going, I thought all my medical expenses were tax deductible. No, they're not. 97% of Americans try to itemize or itemizing doesn't make sense for them and they get no write off. So I'm going to talk about the four ways. Let's do it this way, okay? 1, 2, 3, 4. There's four ways you could write off medical expenses. Now I'm going to take some questions on medical expenses here in just a moment everybody. But let me get these four methods out there. The first option is you can itemize and that's where you pay for it personally. And then on a schedule on your 1040, it used to be schedule A, you're going to write them off and you can write off any expense over 7.5% of your AGI. That, that's itemizing sucks. It's terrible. You'd have, if you make 100 grand, you can't write off the first $7,500. It's terrible. I don't want any of my clients itemizing. Now, some of you may have what's called an FSA at work, a flexible spending account. This year, what we can do on a flexible spending account is 2,750, $2,750 up to that. And it's a use it or lose it. So you have to turn in your receipts by a certain deadline for 2021. You have to use it or lose it. And again, if you don't turn in your receipts, you don't get reimbursed. Now, if the company reimburses you, that's tax free. That's the beauty of this. You get essentially a tax write off for your medical. So if any of you have a day job and you have a flexible spending account, turn in your receipts or you lose it. All Right, now your next option is the health savings account and then the health reimbursement arrangement. Now, we're going to talk about the HSA just for a moment. I could do an hour lecture on it and you would have fun. I promise you, you'd have fun. HSAs are pretty cool now, but an HRA, I just mentioned briefly is a health reimbursement arrangement. And this is if you have a small business, you have to have a small business. For this one, you have to have a small business. And we do kind of a reimbursement where the company reimburses your medical expenses. Now, if you're married or single, the structure is going to look different. You have to have an HSA doc. I mean an HRA document. We charge 400 bucks to give it to you for the year. You self monitor it. There's no insurance company involved. It's all you now in my book. So the tax and legal playbook, you can get it at Amazon right now. I have a whole chapter on healthcare and I go through all these strategies and you'd want to. I've got YouTube videos on these independently. But chapter 11 is wise healthcare strategies. It's only about 11 pages. It's not. You can read it in one evening and make a list of what you need to take advantage of again, young or old. Some of you young people in your 20s are like, I didn't even think about this. Some of you that Are older going, I never tried because I never got a write off. Well, now you do. So think about the HRA if you have a small business. All right, now let's hit the Health Savings Account. Woo. Okay. The Health Savings Account is a tax deduction on the front page of your tax return. You don't have to have a small business, no small business required. Your company may offer an HSA plan, they may not. It doesn't matter. You can set them up independent of your day job. You get to invest the money however you want and it comes out tax free for any medical expense the rest of your life. So this is really cool because see, let's think about a Roth ira. You have to put pay taxes before you can put money in a Roth. Then it grows tax free and comes out tax free. That's cool. You have to wait till you're 59 and a half and it's tax free the rest of your life. With a regular ira, you get a tax deduction on the way in. Tax free growth or tax deferred. Because when you pull it out, you pay taxes at age 59 and a half. But look at what's cool about the Health Savings Account. You get a tax deduction on the way in. No matter how much money you make, it grows tax free. You invest it in anything you want and it comes out tax free at any age. For medical, so freaking easy. So awesome. I own a rental property in my HSA in Chicago. Little meth lab. It's adorable. And I also own some cows. I own 10 cows on a little farm in my HSA. All the profit from my cows and my rental go into my HSA and can pay for my medical, my spouse and dependent children. Boom. So the HSA is a front page expense. Write off any income, no small business required, any income level. And there's so much to learn on this. Again, I've got the book additional videos on YouTube. Just type Kohler HSA. And I've got some great videos out there. Now the deduction this year, this is in the Mark Kohler calendar year. Your deduction for 2021 if you're single is $3,600 and if you're married, it's $7,200. That's off the front page of your tax return. So you can do that and still do a Roth IRA and do a 401k. Now the only requirement, the only requirement to have an HSA is you have to have a high deductible health care plan. So if you're healthy and you have a high deductible plan that you never use anyway. Whether it's at work or you pay for it yourself. You just have to have a high deductible plan. You can go open an HSA anywhere you want. You can even have a crypto hsa. We've got our Gemini app crypto HSA so you can fund money in your health savings account and buy cryptocurrency and any money you make is zero taxes and the money comes out for health care the rest of your life. What? Right? So cool. And let me tell you a few things here. Some of you that are young people, this will pay for the maybe babies you have. Someday you might have a little family if you're older. This could pay for long term care. If you have a family member in drug rehab they can pay for rehab. They can pay for acupuncture and dental and chiropractic and eyes and copays and prescription drugs and oh my gosh so much. That's the hsa. So pretty darn cool. If you want to open a self directed hsa, write this down. Corey, can you bank comments in there or do I have to go to directed ira.com if you go to directed ira.com you can open up an HSA regular or an HSA crypto account, put money in it tomorrow and buy crypto on the weekend. Good to go.