S-Corp./Health Ins.

[Gretel]

I am a little in doubt about reporting on 1120S.

Health Insurance paid by Corp. needs to be added to L. 7 and L. 7 should match W-2's, right?

Since the amount actually paid by Corp. doesn't quite match the amount reported on W-2 (because of Dec. paid in Jan.), wages reported don't match 1120S.

Am I doing the reporting right?

[John of PA]

Not line 7

Gabriele,
I would not include the health ins on the 1120S line 7 officers compensation. I would deduct it as employee benefits on line 18. The W-2 would have the health ins benfits included in box 1 wages, but not any other boxes (not FICA or Medicare). Then yes the health insurance can be deducted back out on the 1040 line 29. I would not worry about wages reported on the W-2's (W-3) not matching the 1120S wages, as there are several reasons the 2 may not agree (accrued payroll). Though it's a good idea to do a quick reconciliation of wages per 1120S to wages per W-3. Hope this helps.

[Bees Knees]

The 1120S instructions tell you to report the health insurance on lines 7 or 8, and not on line 18.

[John of PA]

I like line 18!!!

Thank you Bees Knees, I humbly admit I just learned something. I have never had a problem from IRS putting it on line 18 as that would be where it logically goes. Does anyone else out there put it on line 18, or will I have to change my procedure for the new year!!

[rosieea]

Thank you Bees Knees, I humbly admit I just learned something. I have never had a problem from IRS putting it on line 18 as that would be where it logically goes. Does anyone else out there put it on line 18, or will I have to change my procedure for the new year!!

FWIW, I've always included it in line 7 compensation for officers and line 18 for non-shareholder employees.

[John of PA]

What IRS wants

Knowing now that IRS wants it on line 7, I will start doing such, thank you all.

[OldJack]

W2 box 1 & 14

Knowing now that IRS wants it on line 7, I will start doing such, thank you all.

Of course you know you add it to the W2 box 1 and box 14 then deduct it on the 1040 page 1.

[John of PA]

Box 14, Good point

Good point, don't forget box 14, which is for information purposes only.