S Corp Wages Include Health Insurance Premiums

[Speechly]

As a >2 owner. of my S Corp, I understand that my W-2  Box 1 wages must include my S corp Health Insurance Premiums.   My question is: In TurboTax Business/Your Deductions/Compensation and Benefits/Salaries and Wages Paid. The wage I enter for me as a >2% owner of my S Corp already includes my health insurance premiums. I then again enter my health insurance premiums at: Insurance, health and other benefits:  This amount I've entered for health and dental is then added to my total Salaries and Wages paid amount.  This seems like I'm adding it in twice and I not?  Should I be deducting the health insurance premiums from my wages before I enter my wages in the salaries and wages paid section?  I hope this makes sense cuz I'm lost.  

[ThomasM125]

You shouldn't enter the shareholder health insurance benefits separately on your business tax return as insurance expense. They are included in the shareholder wages, and that is the only time they should get deducted on the business tax return. When you do your personal tax return, the premiums will be included in your wage income and then deducted as self-employed health insurance. So, you deduct the premiums as wage expense on the business tax return, then pick them up as income on your personal tax return, then deduct them as self-employed health insurance on your personal tax return. So, they are deducted twice and added once, that is how you get the deduction.

[Mike9241]

not quite sure what you are doing but line 7 of the return should include the health insurance that the corporation paid for your health insurance and is entered nowhere else on page 1 of the 1120S. it also should appear in box 14 of your w-2 - to remember to take the deduction on your 1040.

say $10,000 for wages and $2,000 for health insurance then line 7 should be $12,000

[Speechly]

Thanks you...that makes sense...I sincerely appreciate your time to reply

[Speechly]

Thank you.  That helps

[CatEater]

This does not work.

The way to deduct self-employed health insurance premiums is to have the amount reflect in box 13 of K-1 with code M.  Entering the insurance premium as salary will not produce the correct K-1.

[jph99]

I understand this theoretically... but having a problem.

I am an s-corp owner and I have both a W-2 and K-1 from the company.

My W-2 shows my medical premiums in box 14 (let's say $6000), and that amount is included in ("Plus") my box 1.

MY UNDERSTANDING is that on my personal return this $6000 should go on Sched 1, line 17 "Self-employed health insurance deduction"

I would love to just go add that number to that line, but when I try to enter anything to do with "self-employment expenses" TurboTax tries to create a Schedule C -- and I don't need or want that.

HOW do I just add that amount on that line?  (also trying to amend 2022 to do this as well).

Thanks in advance!!

[RobertB4444]

Your medical premiums have already been deducted from your income on your W2.  So you don't get to also enter them on the self-employed health insurance line and deduct them again.  You just enter it as the W2 has them.

If you were paying out of pocket for your health insurance instead of having the company take it out of your paycheck then it would go on the self-employed health insurance line.

@jph99 

[jph99]

As @ThomasM125  first replied (and as I understand it).... in my situation as an owner...

"They [health premiums] are included in the shareholder wages, and that is the only time they should get deducted on the business tax return. When you do your personal tax return, the premiums will be included in your wage income and then deducted as self-employed health insurance."

Accordingly, the health premiums shows in W-2 box 14, and are ADDED to my W-2 box 1, but not deducted in turbotax.  Is it a matter of the code in box 14?  If so, what should that code be?

See:  https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical...

I have deducted this on Sched 1 line 17 in past years, but missed it in 2022, so I will amend (once I figure out how) and double-check for 2023 as well.  Didn't there used to be like an "expert mode" or something where you could add info directly to your schedules/forms?

[ThomasM125]

If you have the desktop version of TurboTax, you can use the Forms icon on your menu bar to bring up the forms in your program. You can go directly to schedule 1 but you aren't allowed to make an entry on line 17 for self-employed health insurance. You have to work through the question and answer routine for that as there are more than one factor in determining your correct self-employed health insurance deduction.

When you enter your K-1 schedule from the S corporation will will see under Other Situations you can choose the I personally paid health insurance option. 

Then you enter your Medicare wages reported on your W-2 form and the amount of your health insurance premiums. Your allowable deduction will show on line 17 of Schedule 1 of Form 1040.

[jph99]

omg.... this looks like the answer as I try to amend 2022.

Thank you!

REALLY ought to be another way to dig down to this -- it is more related to W-2 than K-1 for people in this situation (owner who also draws a salary).

[Mike9241]

you are correct the S-corp health insurance is entered in box 14 and grossed up for box 1 of your w-2. when you enter the k-1 info in step mode, there will be a line asking about this health insurance. under the other situations page. that box must be checked.

checking it will open a new screen where you'll be asked about medicare wages and the premium paid.  they're not entered anywhere else in Turbotax. (not directly on schedule 1)

th health insurance then flows yo schedule 1 line 17