Home Office Warrior: Hire Your Spouse

June,

I saw your guest post on Home Office Warrior and had a follow-up question.

You mention hiring your spouse and providing "generous" employment benefits, such as health insurance coverage. I'm wondering whether my spouse has to work for me as a full-time employee for that to work.

My wife does a few things for me, but it's nothing near full-time. Health insurance and copays are eating our lunch. Can I hire her and provide her "family" benefits if she only works about 10 hours a week?


Todd Smith, Attorney at Law
Austin, TX
todd@appealsplus.comSource

Dear Todd,

Your wife may work for you for as few or as many hours as you choose. Her pay must be comparable to others in your geographic or virtual area who do the same kind of work .

This is not a place to be creative. Your spouse must really work for you and you must set it up formally. You must ...

File all federal employment and state employment forms and pay your wife by check or direct deposit into her account.

Set up a health benefit plan for her -- referred to as a Plan 105 for IRS code section 105. You can get more info on Section 105 at BizPLan or contact John Gill at BizPlan 800.422.4661 ext 4345 or John@tasconline.com. I have no financial relationship with John or BizPLan. I use their services for my clients. They are good, and John explains this well. Once the plan is set up all medical insurance as well as medical expenses for the entire family may be a business deduction.

There is more information on this here in my blog in the category payroll -- spouse as employee .

Best,
June