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Professional Practice

§105(h) Medical Reimbursement Plan — Deduct Family Medical Above Insurance

C-corp (or spouse-hired setup) can reimburse 100% of family medical expenses tax-free — bypasses 7.5% AGI floor.

Overview

IRC §105 lets a C-corp reimburse employee (and family) medical expenses tax-free with full corporate deduction. In S-corps and LLCs, similar effect via hiring spouse as W-2 employee with §105(h) plan — spouse's family = professional's family. Reimburse dental, vision, orthodontia, LASIK, mental health, deductibles, co-pays, prescription glasses, long-term care premiums, and other medical costs not covered by insurance. §105(h) nondiscrimination rules apply if practice has other employees; ICHRA/QSEHRA variants may fit small practices.

Best fit
C-corp practicesSolo LLC/S-corp with spouse-employablePractices with $10K+/yr out-of-pocket medical
Estimated impact
$5K–$25K/yr tax-free medical benefit

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