Question

Self Employed LLC S Corp: Health Insurance payments on W2

Forum|Forum|4 years ago
January 16, 2022
1 reply
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Perhaps this question has been asked in some TT forum some where but I could not find it.

I am an IT contractor. I have a LLC S corporation set up. I pay myself as an employee of my LLC. My question that I am looking for a clear answer for is this:

Do I include the health and dental insurance payments that were made by the LLC - and will be recorded as a business expense - as income on the W2 statement to be generated? If so, should I assume that TT Business will let me know how /where to record these payments or do I just simply add all of the premiums paid over the 12 month period and add that amount to the gross compensation paid?

Any recommendations - or good links to articles - that offer best recommendations on how to handle health insurance premiums paid, either on the business side and or on the individual side (individual 1040 return) would certainly be helpful.

Thank you for your time.

Not A Product Question

PatriciaV

Employee

Yes. Because your LLC is an S-Corp, holds the health insurance policy, and pays the premiums on your behalf, the amount of those payments should be reported to you on Form W-2 as additional Wages (Box 1).

If, however, the insurance policy had been in your name and you paid the premiums yourself, the LLC would be able to deduct the cost as a business expense only if reimbursement was made to you then reported on your W-2.

For more info, see 2020 IRS Publication 535, Business Expenses, Insurance, Self-Employed Health Insurance Deduction.

See also IRS General Instructions for Form W-2, Box 1, number 5.

@gwjm56 - edited after further review
[Edited 01/18/22 | 3:12 PM PST]

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