Does your S corporation directly pay for or reimburse you for your health insurance premiums? In 2006, the IRS indicated on its web site that you can’t deduct such costs “above-the-line” if the health insurance is purchased in your own name.
Strategy: Claim above-the-line deductions for ’07. A new IRS Notice gives certain S corporation owners official approval. (IRS Notice 2008-1)
The whole story: For , the IRS treats a 2%-or-more shareholder of an S corporation like a partner in a partnership. So corporate health insurance premium payments aren’t tax-free to you, like they are to other employees. Report the payments as taxable income.
A tax-law provision allows a self-employed individual who is not treated as an employee to deduct health insurance—including amounts paid for dependents—up to the amount of his or her earned income from the business. (IRC Sec. 162(l)) The above-the-line deduction isn’...(register to read more)
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