Yes, your return at startup up shows the salaries and compensation twice on the form 1120S. First, we will make the corrections (clear errors) and then I'll explain the step-by-step entries for future reference.
- Go to "Forms Mode" when you first sign in.
- Open form 1120S. Your salary entries are showing correctly (salary plus health premiums) in line 7 and then the salary part is being incorrectly repeated in line 8 which (flows from the worksheet directly above line 8).
- In that worksheet click the amount in line A and the "plus sign" for supporting details and clear that sheet out. There should not be any entries there.
- Scroll down that form 1120S to line 18 and the Worksheet directly above that line. Click the amount in line A and clear out anything there and enter a zero "0" Since you are a more than 2% owner/employee no amount belongs in the Employee Benefit Program deduction since your premiums are shown in line 7 above. Below is an extract from Form 1120S Instructions.
- Next, still in forms mode, delete the form 1125E from the left hand menu. Since your receipts were less than 500,000 that form is not needed and is only adding to the confusion.
- Now you can go back to the "Step-by-step" mode.
- In the "Deductions" summary you should see in the "Salary and Wages" section a total of your salary and medical premiums.
- "Update" that topic. Here you should enter the total of your wages and medical premiums paid for you by the company. If you just enter the salary here and then the health premiums later, they will still correctly total on the summary page and on the form 1120S but show individually in the topics (per the extract below) and this will cause an error later.
- Now "Update" the "Insurance, health and other benefits" topic
- Since you entered the premium in the salary topic you can delete the amount from here. This topic is for separating out the premiums paid for the less than 2% owner/employees (extract below). If you do separate your salary and premiums in these topics, you will get an error in the review asking for an amount for line 18. You will need to enter a zero "0" to clear the error and that will work.
- Bottom line: In the step-by-step if you enter your wages paid plus health premiums paid in the Salary and Wages topic and not create an unnecessary form 1125E (less than 500,000 receipts) then all should flow/work properly. If an error should happen to show up for line 18, enter a zero and the error will clear.
"Line 18. Employee Benefit Programs Enter amounts for fringe benefits paid or incurred on behalf of employees owning 2% or less of the corporation's stock. These fringe benefits include (a) employer contributions to certain accident and health plans, (b) the cost of up to $50,000 of group-term life insurance on an employee's life, and (c) meals and lodging furnished for the employer's convenience. Don't deduct amounts that are an incidental part of a pension, profit-sharing, etc., plan included on line 17 or amounts reported elsewhere on the return or on Form 1125-A. Report amounts for fringe benefits paid on behalf of employees owning more than 2% of the corporate stock on line 7 or 8 (or Form 1125-E), whichever applies."
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