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S-Corp, Wages, HSA and health insurance

HOPE2
Level 8

Hi, I need your help please.

Fringe benefits for more 2% shareholder go on W-2 box1 only when S-Corp paid or reiembursed. When the salary of more 2% shareholder based on his proficiency and working hours determined ( I call this part by A ), should fringe benefits be added to part A or already included in part A?

My client used RcReport, He said, it did not ask me how much you want to contribute for HSA or how much would be your health premium to be added part A. If should it be added to part A a kind of it is different than Report?

 

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Accepted Solutions
TaxGuyBill
Level 15

@HOPE2 wrote:

My client used RcReport,


 

Using a third-party website like that is only a rough guideline, and circumstances vary that can make your clients "reasonable compensation" much different than that.  So while it is great starting point, don't rely solely upon that website.  You and your client need to determine what "reasonable compensation" is for your client's specific circumstances.

As for your question, I *THINK* you are asking this:

Let's say you determine that "reasonable compensation" is $100,000.  One option could be $100,000 of wages.  Another option could be $80,000 of wages plus $20,000 of health benefits.

 

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2 Comments 2
TaxGuyBill
Level 15

@HOPE2 wrote:

My client used RcReport,


 

Using a third-party website like that is only a rough guideline, and circumstances vary that can make your clients "reasonable compensation" much different than that.  So while it is great starting point, don't rely solely upon that website.  You and your client need to determine what "reasonable compensation" is for your client's specific circumstances.

As for your question, I *THINK* you are asking this:

Let's say you determine that "reasonable compensation" is $100,000.  One option could be $100,000 of wages.  Another option could be $80,000 of wages plus $20,000 of health benefits.

 

HOPE2
Level 8

Perfect, as usual.

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