Be sure to follow the special IRS rules that allow you to deduct your health insurance premiums.
These rules are particularly important if your S corporation employs your parents and/or non-dependent children who don’t own any stock in your corporation.
And be aware: If you handle things the wrong way, your family will be out the money paid for the health insurance. That’s right. If your S corporation claimed an insurance deduction for the cost of health insurance premiums to cover your non-stock-owning relatives, you’ll get a zero deduction.
Three ways we consult with our clients to help:
- S corporation owner insurance basics. If you own more than 2-percent of an S corporation, you need to follow three vitally important steps if you want to deduct your health insurance premiums.
- We’ll explain the “family member surprise.” The surprise is that your family members who work for your S corporation are deemed (by tax code Section 318 attribution rules) to own the same percentage of stock as you do! And this means that the rules that govern how you deduct your health insurance also apply to certain family members.
- We’ll explain stock ownership by “attribution.” In recent guidance, the IRS concluded that you can take the self-employed health insurance deduction if you own the stock solely by attribution (provided you meet all the other requirements). We’ll explain them to you in a language you can understand. And if you’ve messed up, we’ll show you how to fix the errors you made.
We’ll tell you how to fully comply with the law and come out as a winner, Contact Meese Khan, LLP today!
Phone: 623 935 1005