1947121
Hi:
Health insurance premiums paid by my wholly owned sub-S can be deducted on my personal return, reducing Adjusted Gross Income. They are included in box 1 of the W2 I generated with Business TurboTax and they are included in box 14 with the label "Health Ins". I enter the W2 into my personal return with TurboTax Premium, but no reduction of my AGI appears. How do I make my 1040 reflect that? Do I enter it somewhere else in my personal return? Or do I need to make it somehow appear on my K-1?
Thanks in advance for your assistance!
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Enter the health insurance premiums paid by your S-Corp in the K-1 section of TurboTax.
To enter the K-1 from your S-Corp into your personal 1040 return, please follow these steps:
The premiums will show on Schedule 1 of the 1040 as an subtraction to income.
While a K-1 for a partnership would have an entry for health insurance, S-Corp K-1s do not. The insurance amount is shown on the shareholder's W-2 (as yours has).
According to the IRS Instructions for Form 1120S (p. 16):
Report amounts paid for health insurance coverage for a more-than-2% shareholder (including that shareholder's spouse, dependents, and any children under age 27 who aren't dependents) as an information item in box 14 of that shareholder's Form W-2. A more-than-2% shareholder may be allowed to deduct such amounts on Schedule 1 (Form 1040), line 16. To find out if the shareholder can claim this deduction, see Self-Employed Health Insurance Deduction in chapter 6 of Pub. 535, Business Expenses.
If the health insurance was NOT through the Healthcare Marketplace (with a 1095-A), then go through the section where you enter your K-1. Look for the check-box that asks about health insurance, then check that and answer ALL of the followup questions.
Enter the health insurance premiums paid by your S-Corp in the K-1 section of TurboTax.
To enter the K-1 from your S-Corp into your personal 1040 return, please follow these steps:
The premiums will show on Schedule 1 of the 1040 as an subtraction to income.
Thank you so much, Irene! The AGI is reduced as I desire. One follow-on question, however. Since this is in the K-1 section, I assume the insurance amount should appear on the K-1 generated by my Sub-S. The health insurance appears in box 14 of my W-2 and is included in box 1, but I don’t know how to get it to appear on my K-1. So can you help me one more time so that I can maneuver through TurboTax Business and get the health insurance on to my K-1?
Thanks again.
Terry
While a K-1 for a partnership would have an entry for health insurance, S-Corp K-1s do not. The insurance amount is shown on the shareholder's W-2 (as yours has).
According to the IRS Instructions for Form 1120S (p. 16):
Report amounts paid for health insurance coverage for a more-than-2% shareholder (including that shareholder's spouse, dependents, and any children under age 27 who aren't dependents) as an information item in box 14 of that shareholder's Form W-2. A more-than-2% shareholder may be allowed to deduct such amounts on Schedule 1 (Form 1040), line 16. To find out if the shareholder can claim this deduction, see Self-Employed Health Insurance Deduction in chapter 6 of Pub. 535, Business Expenses.
Thanks again, Irene. These little subtleties are hard to find online. I am impressed with the knowledge you have at your fingertips. You have solved a major issue for me.
Terry
Hello @Irene2805 , my situation is a bit different I think but would appreciate your insight.
I am the son of shareholders for a sub-s corp and receive fringe benefits as an employee (w-2) of the s-corp. This is the first year that our accountant has included me in the de-facto "2% shareholder" group and my Simple IRA and health insurance premiums now show as income on my w-2 and need to be entered as an above the line deduction . How do I do this in turbotax home & business 2021 desktop without a K-1? I do not own any shares of the s-corp but I am an officer if it matters. I see lines 16 & 17 of Form 1040 Schedule 1 is where the deductible amounts need to show up.
Thank you for your help,
Yes, you would report the health insurance on Line 17 and the IRA on Line 16.
Reporting 2% Defacto Shareholder Health Insurance
The question is more "How Do I use TurboTax step-by-step to enter the number so it shows up on line 17 of schedule 1?"
This is a calculated field and a worksheet is needed. I figured out how to pull the form "Health LTC Wks" into the file, but I am wanting to use the step-by-step feature to do this for piece of mind that its getting put in all the places to prompt me for more info later if needed.
Thank you!
@bradkuhl wrote:The question is more "How Do I use TurboTax step-by-step to enter the number so it shows up on line 17 of schedule 1?"
Enter a K-1.
I know that you don't have a K-1, but that is what you need to do. Borrow a copy of your relative's K-1 so you can enter the name, address and ID number of the S-corporation. But then enter zero for the income.
While in the K-1 section, there will be question about health insurance. Check that box, and answer all of the followup questions (be sure to answer the question about Box 5 of your W-2).
Thank you, i had resolved to myself that i did, infact need or should have a K-1 at this point. I will have to see what i can do. Thank you.
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