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Medicine For The Sole

Health insurance for sole proprietors

This story appears in the May 2001 issue of Entrepreneur. Subscribe »

Question: We've been told a sole proprietor can set up a medical account that will reimburse medical expenses, including those of family members. We have not been able to confirm that. Where can we look?

Doug Miller

Horseshoe Bay, Texas

Answer: You are referring to Section 105 of the Internal Revenue Code. This provision permits the self-employed-including sole proprietorships, partnerships and LLCs-to deduct 100 percent of their health-insurance premiums and out-of-pocket medical expenses, a benefit otherwise limited only to C-type corporations.

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