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TJScott
January 19, 2024
Question

Reconciling S-Corp Healthcare Insurance with the 1120S Balance Statement

  • January 19, 2024
  • 1 reply
  • 0 views
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!

1 reply

T
Teri11_2
March 24, 2024

Health insurance premiums for S-Corp SH (Shareholder/Owner) are usually paid to insurance provider via AP and coded as health insurance expense on your books.  This same amount s/b added to payroll as "imputed income" (which means you don't get the money but it was paid for you and you must pay the taxes owed on it). This increases her income by that amount to be taxed and then it is deducted out to not pay to her since the insurance company was already paid. Not sure why there is a credit going back to that account on your books. That part sounds like maybe not setup correctly.

R
RayeLLC
May 29, 2024

I'm sorry to hijacked this conversation but you seem to know how S-Corp Owner health insurance payments work. I am using QB Online. I am an LLC that is being taxed as an S-Corp effective 1/1/2024. I have purchased health care insurance outside of my company and pay for it with my funds. My accountant said I can be reimbursed for paying the insurance. I need help with the following:

 

1. I want to reimburse myself for what I have paid so far this year and make sure it reflects correctly in the accounts and on my W2.

 

2. I would like to reimburse myself going forward as I run payroll if that is possible so it posts correctly. If not I can do #1 monthly. I just want to make sure it shows correctly in my accounts and on my w2.

 

Thank you.

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