Bob - In my example, I assume no other employees (one-person S Corp). If there are other employees, then forget about the above the line deduction because a COBRA payment would not be a qualified plan. Does ACA or DOL issues apply to a one-person company? My insurance was terminated covering two people. I tried to keep my insurance, but Obama screwed me. Ironically, I am paying less now for better medical coverage than I had with United Healthcare. Still, our Nation's children will be paying for it in the long run.
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M. Daniel Martin BA
M. DANIEL MARTIN, CPA EA
Babylon NY
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Original Message:
Sent: 08-31-2015 08:24
From: Robert Sick
Subject: Self employed health insurance
I have researched this, contacted RIA and ADP with little satisfaction.
If policy is in name of shareholder and reimbursed or paid for by the S corp it is deductible, reportable on W-2 and above the line deduction on 1040. See IRS Notice 2008-1.
Here is where I have not come up with an answer, What about ACA rules and DOL? I was told that in order for health insurance to be deductible the policy must be purchased thru SHOP exchange, per ADP. Per RIA, issue not yet addressed. These reposnses are somewhat dated (i.e. 2/2015). I had little confidence in either response.
Do a search on IRS website " S corporation Compensation and Medical Insurance Issues."
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporation-Compensation-and-Medical-Insurance-Issues
This would be good topic for class, assuming some one actually knows the answer. This should not be this difficult. I have had several clients with S corporation ask for guidance on this issue.
Good luck.
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Robert Sick
ROBERT SICK, CPA PLLC
Patchogue NY
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Original Message:
Sent: 08-30-2015 18:27
From: M. Daniel Martin
Subject: Self employed health insurance
Assumimg she is the only employee it is deductible from S Corp profits. Since she is a greater than 2% shareholder, it should be added to her W-2 as a taxable fringe benefit.
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M. Daniel Martin BA
M. DANIEL MARTIN, CPA EA
Babylon NY
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Original Message:
Sent: 08-27-2015 09:14
From: Sandra Johnson
Subject: Self employed health insurance
David,
The COBRA insurance should be in her name and so I believe it is deductible.
Sandy
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Sandra Johnson
SANDRA JOHNSON, CPA PC
Bellmore NY
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Original Message:
Sent: 08-26-2015 14:11
From: David Rothfeld
Subject: Self employed health insurance
I have a client that is a 100% owner of a S Corporation.
She pays for health insurance for herself and her daughter through her late husband's union as a "COBRA" payment.
My CCH "Master Tax Guide" says that "you can deduct from gross income 100% of amounts paid ..." The TaxBook says that "For more than 2% shareholders, a policy can be either in the name of the S corporation or the shareholder."
Do COBRA payments count as an adjustment to gross income (line 29 of form 1040)?
Thank you for your feed back.
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David Rothfeld
DAVID J. ROTHFELD, CPA
Hicksville NY
516-433-2129
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