Taxability of Life Ins and Health Premiums for S Corp. Shareholder.

[S&D Associates]

I have a new client who converted from a C Corp to S Corp for 2014 tax year. The S Corp paid the Life Insurance, Health Insurance and Long Term Care premiums for the more than 2% shareholder. Company used ADP for payroll. Client was not aware of having to include these fringe benefits on W-2. Is there a way I can include these amounts as income on Personal return (before allowable deduction for the Health Care and LTC) without having W-2 corrected?

[ATSMAN]

I have a new client who converted from a C Corp to S Corp for 2014 tax year. The S Corp paid the Life Insurance, Health Insurance and Long Term Care premiums for the more than 2% shareholder. Company used ADP for payroll. Client was not aware of having to include these fringe benefits on W-2. Is there a way I can include these amounts as income on Personal return (before allowable deduction for the Health Care and LTC) without having W-2 corrected?

I have one client who gets a statement from his insurance agent titled "cost of insurance" for key man coverage. I include that on line 21 as other income. I suppose you could do the same.

[TaxGuyBill]

They are required to be on the W-2. That would mean it should be corrected.

Once they are on the W-2, you may be able to deduct it off again as the Self Employed Health Insurance Deduction. If they are not on the W-2, you can't use the SEHI deduction.

[jsamans]

I have a new client who converted from a C Corp to S Corp for 2014 tax year. The S Corp paid the Life Insurance, Health Insurance and Long Term Care premiums for the more than 2% shareholder. Company used ADP for payroll. Client was not aware of having to include these fringe benefits on W-2. Is there a way I can include these amounts as income on Personal return (before allowable deduction for the Health Care and LTC) without having W-2 corrected?

Without correcting the W-2?

You can put anything you want on the 1040, but the figures won't match the W-2, so the IRS may flag the return. It shouldn't be a big deal for ADP to change it. Why avoid it?