Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

Or Lev" S-Corp shareholder question: Does the following rule…

quot;For Lane or Lev"S-Corp shareholder...
quot;For Lane or Lev"S-Corp shareholder question: Does the following rule for deducting health insurance premiums on line 29 of the 1040 apply if the shareholder owns 100% of the company and there are no employees?For an employee who is a more than 2% shareholder (and for any person who owns, or is considered to own within the meaning of Sec. 318, more than 2% of the outstanding stock; see Sec. 1372(b) and 318), report group premiums paid in box 1 of his or her Form W-2. Do not include them in box 3 or 5 for Social Security or Medicare tax purposes. Since a more than 2% shareholder is treated as a partner for the purpose of the self-employed health insurance deduction, the shareholder/employee can deduct the premiums on page one of his or her Form 1040 so that the net effect to his or her income is that the wages are included in income, but the health insurance premiums paid by the company are, in effect, excluded by the netting of the deduction against the same amount included in wages. This is the most straightforward case, and will apply to larger S corporations that have group plans in place and pay reasonable wages to their more than 2% shareholders who work in the business.In other words, can the 100% shareholder deduct the ACA premiums paid on his behalf by the corp on his personal return?
Show More
Show Less
Ask Your Own Tax Question
Answered in 44 minutes by:
1/18/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 31,303
Experience: Taxes, Immigration, Labor Relations
Verified

Health insurance premiums are ONLY deductible for employees of S-corporation.

If the taxpayer is the shareholder of S-corporation but is not an employee - no deduction on line 29 is allowed.

Ask Your Own Tax Question
Customer reply replied 1 month ago
He is an employee. He is a 100% shareholder employee with wages and payroll tax deductions. Is this allowed. He has no other employees, but himself at this time.
Customer reply replied 1 month ago
Also, the stars are grayed out on the rating system and I am unable to select and submit. Can you unlock?

Yes - if he is an employee and 100% shareholder - we need to follow certain rules

Because you can't treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes.

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 2017 and you also report the premium payments or reimbursements as wages on Form 1040, line 7.

Ask Your Own Tax Question

How do I rate an answer?
You can give your rating by selecting one of the five faces located under each answer.
Giving a positive rating compensates the Expert for their time with you.
If the value of your question is more than the value of your deposit, then your deposit will be applied toward the balance due and the remainder will be debited from your previously specified payment method.
Please remember that your Expert will not be paid until you leave a positive rating for the answer.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 31,303
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Was this answer helpful?
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 31,303
31,303 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,312 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,362 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

14,120 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,652 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
How do i deduct the ss and medicare with held using the 1040
how do i deduct the ss and medicare with held using the 1040 ez form … read more
Lev
Lev
Tax Advisor
31,303 satisfied customers
Where are the fees deducted for a attorney for a Term
Hi, Where are the fees deducted for a attorney for a Long Term Disability claim on form 1040? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
Are funeral expenses deductible on IRS personal return? My
Are funeral expenses deductible on IRS personal return? … read more
Lev
Lev
Tax Advisor
31,303 satisfied customers
Has the IRS made any ruling on the deduction of state
Has the IRS made any ruling on the deduction of state withholding tax and real estate taxes on Schedule A for 2018. Will there be a requirement to deduct withholding in total before moving to real est… read more
abci168
abci168
Principal
27 satisfied customers
Second opinion] on my 1120s i have to deduct payroll taxes,
second opinion] on my 1120s i have to deduct payroll taxes, IM confused between the difference of the taxes i withheld from the employee paycheck and the taxes the company paid?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
On my 1120s i have to deduct payroll taxes, IM confused
on my 1120s i have to deduct payroll taxes, IM confused between the difference of the taxes i withheld from the employee paycheck and the taxes the company paid?… read more
Lev
Lev
Tax Advisor
31,303 satisfied customers
On my 1120s i have to deduct payroll taxes, IM confused
on my 1120s i have to deduct payroll taxes, IM confused between the difference of the taxes i withheld from the employee paycheck and the taxes the company paid?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,077 satisfied customers
I received a W-2 form from Lina Benefit that is different
I received a W-2 form from Lina Benefit that is different from the one I received from the company from which I receive disability payments. What is the correct amount to enter on my 2017 tax form? … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
736 satisfied customers
Can I submit the federal taxes with an itemize deduction and
Can I submit the federal taxes with an itemize deduction and the state with a standard deduction form? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
Is it O.K. to deduct mold remediation on form 4684? Found
Is it O.K. to deduct mold remediation on form 4684? … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
736 satisfied customers
NYC tax question: An individual can deduct unincorporated
NYC tax question:An individual can deduct unincorporated business tax they pay on their personal return. Can corporate taxes they pay if they own an S Corp and pay NYC corporate tax also be deducted o… read more
Lev
Lev
Tax Advisor
31,303 satisfied customers
Can you help me determine what payroll taxes and rates I'm
Can you help me determine what payroll taxes and rates I'm going to be responsible for in Texas?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
2% shareholder insurance - If a 100% Shareholder is on
2% shareholder insurance - If a 100% Shareholder is on payroll and he has an insurance policy but spouse is on Medicare, is the amount of the insurance premiums of owner plus the Medicare that was wit… read more
Carter McBride
Carter McBride
LLM
473 satisfied customers
In 2018 I had a medicare deduction ($134) taken from my
In 2018 I had a medicare deduction ($134) taken from my monthly deduction ($1971.00 less $134.00 ) but nothing was taken for Part D (drug plan). Last year they took $13.30 per month. Why didn't they t… read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,312 satisfied customers
This is an income tax question. I am thinking of Deducting
This is an income tax question. I am thinking of Deducting next years giving to church this year with pending changes to tax law. As I recall, higher income levels reduce schedule allowable deductions… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Tax law.FICA Tax law. W-4 and W-2 payroll tax withholding
tax law.FICA Tax law. W-4 and W-2 payroll tax withholding from wages and salaries.gross pay and take home pay. number of hours measured direct work assigned by W-4 and W-2 forms. for Medicare eligibil… read more
Lev
Lev
Tax Advisor
31,303 satisfied customers
FICA payroll employer tax withholding tax forms W-4 and W-2
FICA payroll employer tax withholding tax forms W-4 and W-2 forms. The accountant for the man I worked for from1976-1984 did not provide me with W-4 forms to complete and return to him or W-2 forms to… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
14,120 satisfied customers
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2
FEDERAL INCOME TAX: A SINGLE WOMAN RECEIVES A 2016 FORM W-2 FROM HER EMPLOYER WITH A TYPO IN THE SOCIAL SECURITY NUMBER. TO DATE THE EMPLOYER HAS NOT PROVIDED A "CORRECTED" FORM W-2. IS THERE AN IRS "… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,284 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x