How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask WebTaxMan Your Own Question

WebTaxMan
WebTaxMan, Tax Accountant
Category: Tax
Satisfied Customers: 922
Experience:  20+ Years experience-CPAs & My Own Business/IRS Authorized e-file Provider/CA Tax Education Council
3302986
Type Your Tax Question Here...
WebTaxMan is online now
A new question is answered every 9 seconds

LLC Company; two owners. How we can deduct $90,000.00 ...

Customer Question

LLC Company; two owners. How we can deduct $90,000.00 dental expenses for one of owners.
Submitted: 7 years ago.
Category: Tax
Expert:  WebTaxMan replied 7 years ago.
Hi Customer,

The LLC can deduct any premiums paid for dental insurance depending on the plan you set up. The out of pocket expenses paid for dental fees would go on the member's
Schedule A, Itemized deductions. The deduction is limited however. You can deduct the are amount beyond 7.5% of your adjusted gross income. $90,000 seems pretty high for dental expenses. If it was for cosmetic surgery, then the deduction is disallowed. you may refer to Publication 502 for further information.

Should you require further clarification, please never hesitate to ask. It would be my pleasure to clarify the answer to your question. My goal is your 100% satisfaction with all questions I answer.

Regards,

Mike

WebTaxMan, Tax Accountant
Category: Tax
Satisfied Customers: 922
Experience: 20+ Years experience-CPAs & My Own Business/IRS Authorized e-file Provider/CA Tax Education Council
WebTaxMan and 8 other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Hi Mike,
Thank you for your answer, I do however have a follow up question to your answer. Firstly, I was wondering if you knew if dental implants for the entire mouth were considered cosmetic surgery. Secondly, I wanted to know if setting up a medical expenses account under the company would allow me to receive deductions on the medical/ dental expenses that I will have.

Thank You
Expert:  WebTaxMan replied 7 years ago.
Hi Customer,

Certainly, I can answer your follow up questions.

1) Regarding the dental implants and cosmetic surgery, you would need the oral surgeon to sign a report stating they were medically necessary to comply with the IRS code. Usually this is not a problem because of the amount of gum disease that occurs. It isn't always easy to convince the surgeon to do that, however, my father did get the report signed as "medically necessary" for the same procedure.

2) Since the taxes you pay flow through the LLC to your individual returns, you would get the deduction either way. The problem with deducting the actual expenses under the LLC is that one member, let's say the one who will take the medical deduction, influences the botXXXXX XXXXXne of the LLC, thereby treating the other member unfairly.
For that reason, the IRS, nor GAAP (Generally Accepted Accounting Principles) allow for deducting actual expenses from the LLC.


Should you require further clarification, please never hesitate to ask. It would be my pleasure to clarify the answer to your question. My goal is your 100% satisfaction with all questions I answer.

Regards,

Mike




Customer: replied 7 years ago.
Hi Mike,

I had another concern. In regards XXXXX XXXXX response, what would be considered fairly or unfairly in regards XXXXX XXXXX medical expenses under the LLC, is it a certain percentage or sum? Also, for receiving the deduction either way, is that still the 7.5% after the adjusted gross income?

Thank You
Expert:  WebTaxMan replied 7 years ago.
Hi Customer,

My moderators would want me to treat this as a different question and have you repost. I can't do that to such a nice person as you. Plus I do this because I specialize in small business, and love to help in that area (Maybe I'll get a bonus..JUST KIDDING, I'm not supposed to two that either!).

I had another concern. In regards XXXXX XXXXX response, what would be considered fairly or unfairly in regards XXXXX XXXXX medical expenses under the LLC, is it a certain percentage or sum?

It might be easier to think of your LLC just as partnership, but with more legal protection. If you shared the profits, and deductions 50/50, an inequity would result.

Say the LLC grosses $100,000 with no expenses. $50,000 must be reported as income on each members personal tax return. Both members will have to pay taxes on that 50,000, but both members received 50,000. Now if one member wants to deduct 90,000 in dental expenses, The LLC's net income falls to a net profit of $10,000. So instead of 50,000 due you, you only get 1/2 of 10,000=> 5,000. That defines an inequity, thus, the reason it is disallowed. I have a suspicion the other member is a spouse, family member, or friend?

Also, for receiving the deduction either way, is that still the 7.5% after the adjusted gross income?

Since you cannot deduct the medical/dental expenses from the LLC, the expenses must go on Schedule A itemized deductions. If you look at the form, you will see it say "enter your adjusted gross income"--"then multiply that by 7.5%" "If the amount is 0, enter 0" Using my example of 50,000, I would multiply that by 7.5% = 3,750. So the medical deduction would be 90,000 - 3,750 = 86,250. Now that is still awfully high, and may kick in a new tax called alternative minimum tax. Trust me, you do not need to be further confused by that.

My advise to you is to setup some sort of health and dental plan, possible a flexible spending account. This becomes a contract essentially, and spells out who is covered under what, and who pays when etc.

Should you require further clarification, please never hesitate to ask. It would be my pleasure to clarify the answer to your question. My goal is your 100% satisfaction with all questions I answer.

Regards,

Mike


Customer: replied 7 years ago.
Smile Thank you so much
Customer: replied 7 years ago.
Hi Mike,

I just wanted to express my gratitude toward you and thank you for being so helpful. You answered my questions completely and I do appreciate it.

Thank You

Vitaly

Expert:  WebTaxMan replied 7 years ago.
It was my pleasure Vitaly, I mean that. Call on me anytime.

Mike

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.