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:
- 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.
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.
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.
Photo Credit: BigStockPhoto.com