Health Care Spending Account - What Would My Accountant Tell Me?

If you own the business, your accountant will tell you that the reimbursement, any fees and taxes are a deductible business expense.

What Would My Accountant Tell Me?

For owners, any amount reimbursed for their own personal medical expenses, like dental cost, prescription drugs, etc., is not part of their taxable income. In other words, this is rare business expense that is both deductible to the business and not considered taxable income to someone who is both an owner and employee. Your accountant would also tell you the reimbursements are not added to your employees’ taxable income. So, your employees need to know this is a great benefit and extremely tax efficient form of compensation.