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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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How to fill out pre-tax AFLAC insurance premiums?

Resolved Question:

I have employees who have pre-tax and after tax Aflac Insurance from their weekly check, now I am printing their W-2 forms but I do not see the amount deduct through the year. I need to know which is the correct box and code for this insurance and which accounts affect. Ii really need help.

Submitted: 7 years ago.
Category: Tax
Expert:  Ed Johnson replied 7 years ago.

Typically, pre-tax should go into box 12 subject to FICA but not federal taxes.

After tax should go into box 14 subject to federal taxes and FICA.

However, please tell me more about this.

Do you know for certain if your plan is a qualified plan? It sounds like it is, but I need to know if it is a qualified section 125 plan. If you do not know, please give the person a call who helped set this up for you and find out.

What do you mean by accounts affect?

What software do you use for payroll and accounting?

Customer: replied 7 years ago.

About your first question I do not know but we are using QuickBooks probably when we create the payroll item was incorrect because the w-2 don not show nothing in box 12 or 14. This is my first time with this thing and I have to give the employees their W-2s.

Expert:  Ed Johnson replied 7 years ago.

Have you already sent the W-3's and transmittals to the IRS?

Which QuickBooks version do you have?

Customer: replied 7 years ago.

No yet, I want to be sure that everything is okay before we send the W-3. I am using QuickBooks PRO.

Expert:  Ed Johnson replied 7 years ago.

Can you tell me if you are filing as an S-Corp? And are you or any other shareholders 2% owners?

Customer: replied 7 years ago.

This is an LLC and there are 2 owners. CEO has 60% and COO has 40%.

Expert:  RD replied 7 years ago.

Are the owners also the employees and having health insurance premiums deducted? Are they on payroll? Is the LLC filing as a partnership or as a S Corp?

Customer: replied 7 years ago.

No they are not, they are not in payroll, they are filling 1065.

Expert:  RD replied 7 years ago.

Ok.

Pre-tax insurance payment from the payroll will not be subject to FICA, Medicare or federal withholding and hence you will not see that on W-2 wages box 1, box 3 or box 5.

After tax insurance premiums will be deducted from the payroll and will be subject to FICA, Medicare and federal withholding. There is no tax benefits to such deductions. So this would be included in box 1. box 3 and box 5. It may or may not be reported as additional information on Box 14.

When you set it up in QuickBooks-

Pre-tax premiums will be set up under payroll items as Insurance premium-health- pre-tax

and

Post tax premiums will be set up under payroll items as insurance premium-health-after tax

If you have payroll subscription in your QuickBooks and if the payroll items are correctly set up than the W-2 should be correct in most cases

Let me know if you have any other questions.

Customer: replied 7 years ago.

No further questions I really appreciate your help. I want to work with you again

Expert:  RD replied 7 years ago.

Ok. Thanks I appreciate it.

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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