Hi and welcome to Just Answer!It is possible that S-corporation pays medical insurance and some other medial benefits. These payments are treated as fringe benefits - and generally are reported as wages unless specifically allowed to be deducted as business related expenses.For details - I suggest this IRS publication - Employer's Tax Guide to Fringe Benefits - http://www.irs.gov/pub/irs-pdf/p15b.pdfSpecifically for medical insurance deduction is allowed on from 1040 as an adjustment of income. There are certain conditions for S-corporation owners - see instructions for line 29 - http://www.irs.gov/file_source/pub/irs-pdf/i1040.pdf
If you are a more-than-2% shareholder in an S corporation, the policy can be either in your name or in the name of the S corporation. You can either pay the premiums yourself or the S corporation can pay them and report them as wages. If the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you. You can deduct the premiums only if the S corporation reports the premiums paid or reimbursed as wages in box 1 of your Form W-2 in 2012 and you also report the premium payments or reimbursements as wages on Form 1040, line 7.
But if you were also eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2012, amounts paid for health insurance coverage for that month cannot be used to figure the deduction. Also, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2012, do not use amounts paid for coverage for that month to figure the deduction.
I am more than a 2% shareholder.
So - you are eligible to deduct medical insurance premiums on 1040 line 29 based on conditions outlined in instructions.
Then, as I understand it, as the amounts paid for health insurance would be otherwise reported as income, I can deduct these amounts paid?
You could be eligible to deduct medical insurance premiums on 1040 line 29 based on conditions outlined in instructions.
All other medical expenses may be deducted on schedule A line 1 - subject of AGI limitations.
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