Wife & I split LLC equally. We pay ourselves & each pays own medical.Is it more profitable to use cash distribution for everything or use guaranteed payments for medical

[fcarbone]

We both are basically self employed. I am assuming our 2 options are a 50/50 cash distribution and then pay our own medical, or take our cash distribution for salary & guaranteed payments for the medical. Thanks

[DDollar]

To qualify for the self-employed health insurance deduction, the plan must be “established under your business”.  They should be either paid by the partnership, or if established by you, the partnership should reimburse you.  These health insurance premium amounts are reported as (included in) guaranteed payments on line 4 of your Schedule K-1.

To help you calculate the deduction, the amount of health insurance premiums should also be reported on line 13 of your Schedule K-1.