employeehealth insurance

Sep 04, 2007 4 Replies
A

My company is an S Corp with 1 employee. I have taken group insurance for myself and 1 employee. I was able to deduct the group insurance premium as the business expenses. I recently found out that individual plans are very cheaper then group plans. If I plan to take the individual plan for myself and pay my premium and employee takes his individual plan and pay his premium, can I pay the employee's premium to the employee and claim as the business expenses??? Is it tax deductable. I have offered the position with the promise of paying his full health insurnace benefits Thanks arknaren



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B

Not sure where you're getting your tax advice. If you own 5% or more of the Scorp, the Scorp cannot take a deduction for your health insurance/ ___________________________________

-----> real address on hobokeni or hobokenx

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R

The S corp can take a deduction however it is income to the

and the shareholder/employee can then take the self employed heath insuance deductioin on from of 1040 as long as is properly established plan

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S

Though the shareholder, being taxed as a partner, can deduct the cost of health insurance premiums paid on his behalf. §162(l). Stu

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E

Your "plan" that you "established under your business" is to pay your's and your remployees' premiums for health insurance. Hence the S corp can pay his premium or reimburse him for his premiums, and pay your premium. But as an S Corp your premium must be expensed off as W-2 wages (increasing your income, but reducing profit of the S). You then take the premium as a deduction on line 29 or your

1040. This is all in the Instructions for Schedule A of 1040 and 1120S Instructions. Your "plan" is your plan to pay premiums, not the actual policies of insurance, which are not "Plans" (see Webster and read the instructions, not the IRS papers of no authority nor sense). ed
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