I know the merits of using postax dollars for disability premiums but what do people think about this situation. My practice can reimburse its physician employees for individual long-term disability insurance premiums, thus making them pretax. It is my understanding, although maybe not clearly written into IRS code, that if one were to become disabled the IRS would use the tax basis of premiums paid in the year the disability occurred to determine taxability of benefits.
So what if I waited until Dec 31 and if I did not become disabled, then choose to be reimbursed, thus making this premiums pretax. This would then reset the following year. If I became disabled, I would of paid that current year's premiums with post-tax dollars, thus making benefits non-taxable.
What do you all think?
So what if I waited until Dec 31 and if I did not become disabled, then choose to be reimbursed, thus making this premiums pretax. This would then reset the following year. If I became disabled, I would of paid that current year's premiums with post-tax dollars, thus making benefits non-taxable.
What do you all think?
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