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RD
RD, Certified Public Accountant (CPA)
Category: Tax
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Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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corporation deduction for health insurance

Resolved Question:

What is the rule on a closely-held corporation deducting the premiums on officer
health insurance? Is it dependent on the officer having earnings or dividends
from the corporation?
Submitted: 8 years ago.
Category: Tax
Expert:  RD replied 8 years ago.
Is it an S or a C corporation?
Customer: replied 8 years ago.
Reply to Renu V's Post: C corp.
Expert:  RD replied 8 years ago.

If it is a C Corporation, than you can deduct payment for health insurance premiums for owner-employees from the corporate income as a deductible fringe benefit.

>>Is it dependent on the officer having earnings or dividends
from the corporation?

As long as the officer is an employee of the corporation, you can get the deduction for insurance premium.

 

Let me know if you have any question. Bonus and Feedback will be highly appreciated!!!

 

XXX@XXXXXX.XXX

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.

 

Customer: replied 8 years ago.
Reply to Renu V's Post: Thanks, XXXXX XXXXX still have a problem. Officer has NOT been on the payroll for the year in question.
He did, however, have a dividend. Corporation is in the declining years of activity.
Expert:  RD replied 8 years ago.

Was the officer an employee in the prior year - If yes and if the officer is an employee(working for the corporation) but was not paid salary due to financials reason than I would suggest you can take a medical insurance premium deduction.

Let me know if you have any question. Bonus and Feedback will be highly appreciated!!!

 

XXX@XXXXXX.XXX

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.

 

Customer: replied 8 years ago.
Reply to Renu V's Post: No financial problem - there's plenty of money on deposit,that's why he's taking it out as dividends. There was no payroll last 3 years.
There's about $8,000. income this year, but expenses & depreciation will make it a loss, anyhow. Just wondered if he should be charged
with the ins. premiums or deduct them, increasing the loss. Sorry this turned out to be such a BIG issue.
Expert:  RD replied 8 years ago.

In that case, It is advisable to not deduct the amount of insurance premium as an expense. You might want to consider this as a dividend payment to the officer.

Let me know if you have any question. Bonus and Feedback will be highly appreciated!!!

 

XXX@XXXXXX.XXX

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.

RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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RD
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CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..