EP 154 - The Tax Strategy Most Business Owners Have Never Heard Of - 401(h) w David Podell

Send us Fan Mail Learn more on how this and other charitable tax strategies may help you at: https://www.prosperlcpa.com/apply A tax strategy that feels like it should be more famous: a retirement plan design where you can deduct contributions now, grow the account tax-deferred, and later pull funds tax-free for qualified medical expenses. That is the promise of the 401H, and it is exactly why we brought back 401H specialist David Podell to walk through how it actually works in the real world, where the rules are, and who it truly fits. We dig into the core structure: the 401H is not a standalone plan and it is not an HSA. It is a component inside a cash balance plan or defined benefit plan, often built for profitable business owners who want to contribute far more than a standard 401(k) limit. We talk contribution ranges, how the “pooled” investments and accounting work, and why this approach can be a “hidden gem” for high-income entrepreneurs who have run out of obvious write-offs but still want to build long-term wealth. Then we get practical. We cover when you can access 401H money, what counts as qualified healthcare spending (premiums, copays, long-term care, and more), what happens if you do not use every dollar for medical, and why employee vesting and forfeitures often tilt the benefit toward ownership. We also connect it to holistic tax planning: using large deductions to manage AGI, unlock other thresholds, and eventually coordinate Roth conversions after a plan winds down. If you want to stop guessing and start using the same levers high earners use, subscribe, share this with a business owner friend, and leave a review so more people can find the strategy. What would you use a tax-free healthcare bucket for first? CONNECT WITH DAVID PODELL Business Benefits Consultants: https://businessbenefitsconsultants.com