Discussion:The old CA S-Corp health insurance question . . .
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Discussion Forum Index --> Basic Tax Questions --> The old CA S-Corp health insurance question . . .
Discussion Forum Index --> Tax Questions --> The old CA S-Corp health insurance question . . .
| 10 December 2007 | |
| How do I find the discussion on this. I know there is a lengthy one. Or can you CA CPA's help me real quickly?
Client wants to incorporate his Schedule C business early 2008. Only he and his wife will be employees. Does the CA Board of Ins still disallow a group insurance plan for 2 or less employees? And if so, is this client going to lose a self-emloyed health insurance deduction as a result? Are any of you still deducting the health insurance premiums of an individual health insurance policy on the front of the Form 1040 for S-Corp more than 2% owner W-2 recipients? HELP | |
| 10 December 2007 | |
| Take a listen to this podcast. It gave me comfort on this issue. | |
| 10 December 2007 | |
| Thanks PVVCPA. The easiest way to go here then is to have the client have the corporation pay his individual health insurance premiums directly. I reckon I could have him not elect S status, and set up an HRA. Then he should be fine. He is a loan broker, income is merely commissions, won't really ever SALE the business, which is usually why I encourage S election.
But if he insists on S election, I guess an HRA would still work? At least for the premiums only? And then the premiums will still go on his W-2 and on his above-the-line Form 1040? Or in other words, either C or S, would you definitely have the client get his attorney to draw up some sort of a plan? Or do we as the CPA's get involved with drawing up these plans? I guess I will reread and reread the podcast print until something finally sinks in. Thanks for directing me to it. Why can't this stuff be easy and straightforward? Geez. | |
| 10 December 2007 | |
| Kendrick,
My personal opinion is that a 105 HRA plan is overkill. All we are trying to preserve is the deductibility of premiums, which is covered under Sec 106. I believe a one-page company document should be sufficient to meet the definition of a "plan". If you are going to go the 105 HRA route, you don't need an attorney. There are plenty of companies on the web that will be glad to sell you this boilerplate document for under $500. | |
