My wife, Jean, is the sole member of her LLC and she files an 1120S. The LLC pays her healthcare insurance. I am having trouble with the Balance Sheet reconciliation on the 1120S. Here’s the scenario:
- In QuickBooks Online, the Florida Blue premium is a debit to the account, “S-Corp Health Insurance” and Jean’s paycheck (Intuit Payroll) generated a credit to that account.
- On Dec 31, 2023, the balance in that account was ($2,307.26) only because the Jan 1, 2024 premium was charged on Dec 31. On Dec 30, the balance was $0.00.
- In TurboTax Business, Jean’s total compensation including healthcare (per the instructions) falls on the 1120S, line 7.
- S-Corp healthcare insurance per her W-2 is $22,589. This is also included on line 8 per the instructions. So, the same expense is charged twice, making it a nice tax deduction against K-1 twice, though Jean is paying regular income and payroll tax on the benefit.
Is this correct so far?
- On the 1120 S, the Income Statement balances perfectly when I add the $22,589 to my P & L.
- On the 1120S, the Assets of the Balance Sheet match perfectly to QuickBooks Online.
- Total Liabilities, Capital, and Retained Earnings is short by $24,821.
How do I account for the ($2,307) above and the $22,589 deducted twice on the 1120S Balance Sheet so it balances?
Do I create any additional entries in QuickBooks Online to match these things up?
- Those two numbers total $24,896, only $75 off. I can definitely reconcile that with a balance adjustment.
Is that OK? Does it ever end up matching perfectly to the dollar?
Thanks!
