2% Shareholder / S-Corp Paid Health Ins.

[bbrownatl]

Just doing a quick checkup on health insurance paid by S-Corp for more than 2% shareholder.

1) Deduct on 1120S, line 18, Employee Benefit Programs
2) Add to shareholder W2 in gross income and in Box 14 of W2
3) Deduct on line 29, Self Employed Health Ins. Deduction (though p.19-23 of TTB shows it on line 28)

Correct or am I missing anything?

[Possi]

Yes

That's how I do it. You put it so simply!

ps
Did Albert Einstein really say that??

[bbrownatl]

Thanks / Quote

Thanks for the confirmation of the Health Ins. treatment

Re: Einstein, that's my understanding. Maybe I should change it to one of the following:

“It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.” - Dave Barry

"Worried about an IRS audit? Avoid what's called a red flag. That's something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes. That's a red flag." - Jay Leno

[Burke]

Just doing a quick checkup on health insurance paid by S-Corp for more than 2% shareholder.

1) Deduct on 1120S, line 18, Employee Benefit Programs
2) Add to shareholder W2 in gross income and in Box 14 of W2
3) Deduct on line 29, Self Employed Health Ins. Deduction (though p.19-23 of TTB shows it on line 28)

Correct or am I missing anything?

Hello..........., you are deducting it on line 18, and then deducting it again in payroll? If so, STOP. Only other employees' benefits go on line 18. The more than 2% owner's part does not. It goes on his W-2 and is deducted under Salary to Officers. Then, yes, the owner deducts on his 1040, line 29.

[bbrownatl]

Yes, Line 7, Officer Comp.

Good catch. I was not deducting it twice rather I was just indicating it going through line 18. You are right in that the greater than 2% health ins. paid goes to line 7 and not 18. Much thanks.

[ChEAr$]

Hello..........., you are deducting it on line 18, and then deducting it again in payroll? If so, STOP. Only other employees' benefits go on line 18. The more than 2% owner's part does not. It goes on his W-2 and is deducted under Salary to Officers. Then, yes, the owner deducts on his 1040, line 29.

Confirming correct. The amount is added to officer/shareholder/employee's wages. and is not an employee benefit.

Of course no matter where you put it, bottom line's the same. But this insures two things:

1. salaries on page one of 1120s match up with IRS records and
2. corporate contributions to his (mine here! ) IRA under a SEP plan can be maximized.