se health insurance

[michaelmars]

my office is in total disagreement. does the insurance go just on the w-2 or do you add it to the 4th quarter 941 too?

[Karen Lee]

my office is in total disagreement. does the insurance go just on the w-2 or do you add it to the 4th quarter 941 too?

Yes, 941 and 940 and state employment taxes if premium is based on "gross income"

[michaelmars]

Doesn't patter what the premium is based on. a 2% shareholder of an s corp needs to have the cost of his insurance on their w-2, just not sure if it goes on the 941 too.

[Karen Lee]

Yes on the W-2 and the 941 and don't forget the 940. Health insurance premium added to wages for greater than 2% stockholder/shareholder that pays for state payroll taxes based on gross income also needs to be included on the state payroll tax returns.

[JohnH]

I always add it to the Wages entry on the 4th quarter 941 (but not to SocSec/Med wages), because I want the sum of all lines of all 4 of the 941's to agree with the sum of all boxes of the W-2's. If the SocSec/Med entries don't agree with the W-2's there will be a lot of correspondence coming, usually about 2 years down the road. This is a matching that goes on between SSA & IRS and is primarily concerned with SocSec/Medicare Wages. So I don't know if the "Gross Wages" entries are also matched, but I assume that it's posisble that a mismatch there could also generate an inquiry.

[OldJack]

2009 Publication 15B, page 6:

>>S corporation shareholders. Because you cannot

treat a 2% shareholder of an S corporation as an employee

for this exclusion, you must include the value of accident or

health benefits you provide to the employee in the employee’s

wages subject to federal income tax withholding.

However, you can exclude the value of these benefits

(other than payments for specific injuries or illnesses) from

the employee’s wages subject to social security, Medicare,

and FUTA taxes.<<

Form 1120S instructions, page 15:

>>Report amounts paid for health

insurance coverage for a more than 2%

shareholder (including that

shareholder’s spouse and dependents)

as an information item in box 14 of that

shareholder’s Form W-2. <<

I know it is early in the tax season, but come on guys!

[JohnH]

I don't think this was the issue in Michael's original question. It was a given that the info goes on the W-2; his question was whether the 4th quarter 941 should also include the adjustment on Line 2. Seems like a reasonable question to me.

[michaelmars]

"I always add it to the Wages entry on the 4th quarter 941 (but not to SocSec/Med wages), because I want the sum of all lines of all 4 of the 941's to agree with the sum of all boxes of the W-2's" [wish i learned how to use the quote function here"

thanks all and John does have my question right but many times the wages on a tax return do not match the w-2's or 941's. items like aflac withheld do not get reported anywhere and the w-2/941 is just the net amount. thats why we were confused about this item.

Old Jacks answer from the 1120s instructions that the insurance is subject to withholding answers the question, that is should go on the 941's. No where did i see that in the w-2 instrucitons or the irs publication on benefits etc.

thanks all!!

[Karen Lee]

Thanks Old Jack for setting me straight on the 940...

Karen

[JohnH]

Now I'll take exception to something. I have never seen a situation in which the sum of the various boxes on the W-2's did not equal the sum of the entries for the corresponding lines on the 941. I don't know of any way that could happen.

[Gail in Virginia]

Now I'll take exception to something. I have never seen a situation in which the sum of the various boxes on the W-2's did not equal the sum of the entries for the corresponding lines on the 941. I don't know of any way that could happen.

I have seen it happen when someone makes a mistake. :)

[JohnH]

Thanks Gail.

I just KNEW someone was going to point out a situation to prove me wrong.

Guess I'll have to modify my last sentence to say "I don't know of any way that could happen if the forms are all properly prepared."

[kcjenkins]

"I always add it to the Wages entry on the 4th quarter 941 (but not to SocSec/Med wages), because I want the sum of all lines of all 4 of the 941's to agree with the sum of all boxes of the W-2's" [wish i learned how to use the quote function here"

To use the quote function, you can either choose the "Reply" button on the message, which will put the whole message in quotes. Then you can edit out the part you don't want, if any. That is the easiest, and the best, because it puts the name of the poster and date and time of the post, at the start of the quote.

OR, you can manually type in [ quote] at the start of the quote, and then [/quote ] at the end, with what you are quoting in between the two, of course. Note that to make that show up, rather than to indent it as a qyote, I had to add an extra space in each [ ] box. There should be no spaces in the box for it to work.