Discussion Archives:Beaten to death...SH health insurance

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Discussion Forum Index --> Advanced Tax Questions --> Beaten to death...SH health insurance


Discussion Forum Index --> Tax Questions --> Beaten to death...SH health insurance

LJACPA (talk|edits) said:

5 February 2010
I've always been concerned with doing this right, now I'm just plain paranoid. I know this has been one of the most discussed topics on here and I believe I know how to properly handle this. Unfortunately, there's always the other side with the client doing the payroll and when I get it, after-the-fact, it's wrong. This particular client I finally got to do it right in 2008 and SHHI was included in W-2, etc. Perfect. However, this year she 'forgot' and did not include in W-2. So now I'm preparing the 1120S and have copies of the payroll reports and $16,000 of HI for the SH on the P&L, not in Officers' wages. Now what do I do? I know it's wrong to reclass as Distributions (and not on Line 29 of 1040). I know it's wrong to put on 1040, Line 21 - and on Line 29. I know it's wrong to leave in HI deduction on 1120S. I know I should tell the client to amend all 4th quarter and year-end payroll tax returns, etc. But I also know that it's not going to make any difference whatsoever if I simply and conservatively reclass as Distributions and be done with it. They've got wages above FUTA and SUTA and HI wouldn't be subject to FICA anyway. This is where I decide if I'm going to do everything strictly by the book, so to speak and start throwing my clients (my practice) away to another preparer who has no qualms in doing any of the above 'wrong' things. I'm not asking what's right and what's wrong. I'd just like to know what others would realistically do. Thanks.

Dennis (talk|edits) said:

5 February 2010
Amend the payroll reports and charge them for the work...♫ I would limit what to fourth quarter, 940 and w-2/3.

MWPXYZ (talk|edits) said:

5 February 2010
"But I also know that it's not going to make any difference whatsoever if I simply and conservatively reclass as Distributions and be done with it"

Point out Notice 2008-1 makes it sound like the IRS is really serious about this, and let the client decide how much "service" they want. Unless you know the client well and already know the answer.

Blrgcpa (talk|edits) said:

5 February 2010
You can issue another W-2, rather than correcting the original W-2. Issue a new 941. There are no fed taxes involved.

Blrgcpa (talk|edits) said:

5 February 2010
You can issue another W-2, rather than correcting the original W-2. Issue a new 941. There are no fed taxes involved.

Seaside CPA (talk|edits) said:

5 February 2010
I would issue another W-2 with the info for the health ins. premiums. I would not amend 941 or any other payroll tax reports. Page 15 of W-2 instructions says to reconcile amounts shown in boxes 2, 3, 5, 7, & 9 from W-3's with amounts from the quarterly 941's. All of those should agree without amending 941. Have done this several times over the years, & so far not a problem.

Southparkcpa (talk|edits) said:

6 February 2010
I have over 100 biz clients , most of whom use a service. A few of these clients "missed" the warning and their w2 does NOT reflect the SE ins. As long as their FICA wages are above the SE ins, they would have been entitled to the deduction. Accordingly.....

I am taking the deduction and THEN I am compiling a list of these clients (my guess is 10 will be on the list) and in separate correspondence i am instructing them to amend their W2 or risk the loss of deduction. I will supply them with a quick summary to give their payroll service.

I will NOT take time to amend it now.

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