Just a reminder to our do-it-yourself S-Corporation payroll and bookkeeping clients.
Health insurance premiums paid by the company for shareholders/owners is NOT DEDUCTIBLE at the S-Corp level any longer.
The premiums must be included in the employee payroll on the W-2 and then a deduction is allowed on the personal 1040 if the W-2 reporting is correct. This is a target area of IRS and this is an effort to make sure clients are aware of the issue.
Good News!! If you are using Payroll South to process your payroll then proper adjustments have already been made. Also, if you are a Hurst and Hurst client using Small Business Services monthly then we already have you in compliance to be able to maximize the deduction.
We are concerned that many of our Do-It-Yourself accountants/bookkeepers/business owners are going to be very disappointed if they do not follow the requirements. It is not too late to move your payroll to us for the 2015 and get the 2014 compliance for health insurance handled properly.
Don’t forget!! It’s the little things that can make a huge difference in the amount of taxes you pay. Please contact us if you have questions or concerns.