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Important Year End Reminder For S Corp Owners

Posted by McDonald & Osborne Posted on Oct 14 2015

Here we are again. It’s December 8, 2014 and many 2014 U.S.

As we get closer to year end, we wanted to take this opportunity to remind our S Corporation shareholders of some important items to keep in mind.

S Corporation shareholders who own 2% or greater interest in their corporation must include the following (company-paid) fringe benefits on their Form W-2 as additional wages:

  1. Health Insurance - when included on Form W-2, the health insurance is deductible as wages by the corporation. The shareholder receives a self-employed health insurance deduction on page 1 of their personal return equal to the amount included as wages. Failure to include the health insurance on Form W-2 results in NO deduction for the Corporation.
  2. Contributions to an HSA - like health insurance, HSA contributions are deductible as wages by the corporation and the individual receives a deduction on page 1 of their personal return.
  3. It is important to remember that a 2% or greater shareholder of an S Corporation is NOT eligible for cafeteria plan benefits.

If you are currently using a payroll service, please provide them with your health insurance and HSA information as soon as possible. Please contact us if you have any questions.

Lisa Osborne
Office Administration
lisaosborne@mo-cpa.com

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