Imputed income on health insurance premium for K-1
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roboyang
New Member

Imputed income on health insurance premium for K-1

Hi,

 

I am a partner at a large partnership. I get a K-1 from them. Starting this year, they pay for my health insurance but counts it as imputed income. Basically, it increased the guaranteed income and self-employment income in boxes 4a and 14a on my K1. 

 

As far as I can see, Turbotax was able to deduct most of the increased taxes from this imputed income on Schedule 1 as self-employed health insurance coverage. However, there is a small portion (~3%) of this imputed income that is added to my taxes, compared to last year when I didn't get health insurance from them (my ordinary income did not change from last year, so I can clearly see where the difference was). I assume this is from the increase in self-employment income and the associated self-employment tax. 

 

Does this sound right? I am happy that most of the tax on the imputed income was deducted since it was health insurance; but it appears I am still responsible for the self-employment tax portion of it? Or is there a way to deduct that portion too?

 

Thank you!

 

 

2 Replies
Anonymous
Not applicable

Imputed income on health insurance premium for K-1

a partnership can not deduct partner health insurance  - it is treated as a guaranteed payment.   the additional income on the K-1 you pick up is offset by the deduction on your 1040 for SE health insurance (schedule 1 line 16). in addition 1/2 of all SE tax is deducted automatically by TT  on schedule 1 line 14.

from instructions for form 1065:

Guaranteed payments are payments made by a partnership to a partner that are determined without regard to the partnership's income. Some examples of guaranteed payments to partners include:
Payments for salaries, health insurance, ....

roboyang
New Member

Imputed income on health insurance premium for K-1

Thanks. Yes I understand the deductions on Schedule 1 Line 16. But it appears my taxes went up slightly anyway at about 3% of the additional imputed income from the health insurance premium. I think this may have been from the self employment tax for the extra total self employment income which came from the guaranteed payments, which gets taxed at 2.9% after $132,900. Does that sound right?

 

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