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Old 03-30-2014, 02:24 PM
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Small bussinesses and health insurance

For 2013, my husband was a 1099 contract worker. In order to obtain group health insurance, we formed a C-Corp with my husband and I as partners. During the year, we paid for our health insurance premiums through the corporation. We also paid money into a Health Savings Account through the corporation.

Are the health insurance premiums and H S A payments considered a business expense on the Schedule C Line 14 or does this get added to Line 29 on the 1040 form?

Thanks.



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Old 03-30-2014, 03:43 PM
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Originally Posted by zzmonty View Post

Are the health insurance premiums and H S A payments considered a business expense on the Schedule C Line 14 or does this get added to Line 29 on the 1040 form?

Thanks.
A Sch Cof 1040 is required for any business that is a sole proprietorship , or SMLLC,a one-owner business that is not incorporated,i.e., S- or C corp. the HSA contribution made by the corporation is deductible by the corporation, and it is NOT taxable income to the shareholder-employee. If you pay from the C-Corp, then the C-Corp's taxable income is reduced by the amount of the HSAYou must identify on the W-2 the contributions made by the corp;. The corporation’s HSA contribution is a tax-free fringe benefit to the employee that is reported on the employee’s Form W-2 in box 12, using the code “W.” While you, the employee-SH , receive a tax free fringe benefit, your Corp deducts the contributions to the HSA as an employee benefit program expense



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Old 03-31-2014, 12:53 PM
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What about the premiums? If they were paid by the company, is it also "a tax-free fringe benefit to the employee that is reported on the employee’s Form W-2 in box 12, using the code “W.”"?

Thank you,



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Old 03-31-2014, 03:14 PM
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Originally Posted by zzmonty View Post
What about the premiums? If they were paid by the company, is it also "a tax-free fringe benefit to the employee that is reported on the employee’s Form W-2 in box 12, using the code “W.”"?

Thank you,
Keep in mind, the C corp cannot deduct that premium as a cost of doing business on 1120 which is why most corps sponsor group health insurance policies.



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Old 04-01-2014, 08:35 AM
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We had a group health insurance policy, but since there were only two "employees" (myself and my husband). So we only had one policy, a family policy and I was exempt. I was not sure if we were allowed to put it on the Schedule C Line 14, employee benefits.



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Old 04-01-2014, 02:29 PM
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Originally Posted by zzmonty View Post
We had a group health insurance policy, but since there were only two "employees" (myself and my husband). So we only had one policy, a family policy and I was exempt. I was not sure if we were allowed to put it on the Schedule C Line 14, employee benefits.
premiums for individual policies are not a deductible expense for the corp; Sch C is the federal tax form filed by most sole proprietors; one owner businesses. disregarded doesn't apply to corps



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Old 04-07-2014, 04:54 AM
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I'm aware that health insurance is really a big spending item once one adds a spouse and kids and the expense is getting worse. I guess, each one of us should get our own medical insurance, especially now that it can be consider as one of the needs of an individual. Additionally, a survey by the Kaiser Family Foundation discovered lately that family health insurance rates are continuing to trend way up. Luckily, you can pay your health insurance premium with an installment loan.



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