2% S-corp owner med insurance to payroll

[Darlene59]

I'm having a little difficulty understanding one adjustment. When insurance is expensed and added to wages, it seems as if it's being deducted twice. once as an insurance expense and then again as a wage expense. Would someone please show me how this adjustment is done? Is there a corresponding adjustment I'm missing?

[kathyc2]

Debit Officer Salary and credit Insurance. They are both income statement accounts so no change to net income.

Is your question software specific? If so, are you using QB or another accounting software?

[Darlene59]

Just to be sure. After doing so, there will not be an insurance expense on the P&L?

[Anarchrist]

Debit Officer Salary and credit the account the insurance is paid from. The insurance expense account doesn't get used in the transaction. If you're paying the insurance w/ a check or eft from the main checking account, debit Officer Salary and credit Main Checking.

I set up a subaccount under Officer Salary called "Officer Salary - Medical Ins" to track the insurance easily.