Why didn't turbo tax give us any deduction on 1040, line 29 for the S corp medical payments added to our gross wages and in box 14 as SCORP MP on husband's W-2?

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June 1, 2019
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TurboTax Premier Windows

Best answer by TomYoung

In the main Box 14 of the W-2 is a simple "memo" field where employers transmit information to their employees and there's really no standard "code" - a list of standard abbreviations - that are used universally by all employers. In the main entering the Box 14 information, or not entering it, has no effect on your income tax return. Because of that there's only a few IRS-mandated "codes" to be used in this box and different employers can and do use different abbreviations to describe the same thing, like medical insurance paid on behalf of a more than 2% shareholder.

There's a few instances where information show in Box 14 can affect your income tax return and are so widely encountered, (California SDI tax for example), that TurboTax sometimes recognizes the abbreviation and puts the associated dollars in the correct spot of your income tax return. If it doesn't recognize the abbreviation then later in the W-2 interview it provides a drop-down list of items to see if you can identify what the dollar amount pertains to. "Medical insurance paid for by an S-Corp on behalf of a 2% or more shareholder and reported in Box 1 of shareholder's W-2" isn't on that list.

You get that entered on the "Other situations" page of the Schedule K-1 interview. (The statement on that page is poorly worded but it does apply to your situation.)

Tom Young

T

TomYoungAnswer

Employee

In the main Box 14 of the W-2 is a simple "memo" field where employers transmit information to their employees and there's really no standard "code" - a list of standard abbreviations - that are used universally by all employers. In the main entering the Box 14 information, or not entering it, has no effect on your income tax return. Because of that there's only a few IRS-mandated "codes" to be used in this box and different employers can and do use different abbreviations to describe the same thing, like medical insurance paid on behalf of a more than 2% shareholder.

There's a few instances where information show in Box 14 can affect your income tax return and are so widely encountered, (California SDI tax for example), that TurboTax sometimes recognizes the abbreviation and puts the associated dollars in the correct spot of your income tax return. If it doesn't recognize the abbreviation then later in the W-2 interview it provides a drop-down list of items to see if you can identify what the dollar amount pertains to. "Medical insurance paid for by an S-Corp on behalf of a 2% or more shareholder and reported in Box 1 of shareholder's W-2" isn't on that list.

You get that entered on the "Other situations" page of the Schedule K-1 interview. (The statement on that page is poorly worded but it does apply to your situation.)

Tom Young

V

vs5001

You must have received a W2 from the S Corp for the medical income. Then in Turbo Tax K-1 page, go through and verify the K-1 entries; and at the end check Other "I personally paid health insurance premiums". Then enter the amount that you paid and continue to have the amount deducted.

The odd thing here is that Turbo Tax has this Schedule 1 deduction within the K-1 page. It belongs elsewhere. The W2 medical payments from the S Corp are not to be included on the K-1 when the K-1 is created; instead a separate W2 is generated that does not have Social Security and Medicare with-holdings. Tom Young's comments to this issue add more detail.