SCorp Shareholders have a set salary with 401(k) elective deferrals

[PatiP]

SCorp Shareholders have a set salary with a portion withheld for 401(k) elective deferrals that reduce Box 1 wages but added in to Box 5.  They also have SCorp medical insurance as a provided benefit included in their box 1 wages but not in Box 5.   I am trying to book Shareholder payroll to match W-2 Box 1 wages, not Box 5 wages on the 1120S. I was told that you can not book the higher wages reflected in Box 5 as the corporate salary expense on the P&L because the Shareholders can not "double dip" by having the Net income distribution on the K-1 reduced by the deferrals and also have their Fed/state taxable wages Box 1 on the W-2 reduced by the deferral.   If you can not include the Gross wages (salary plus deferral) as Shareholder Salaries where do you record this?  It is a Corp disbursement.  There is no employer matching at this point. 

Any help would be so appreciated!

[IRonMaN]

Wages reported on the 1120S should be gross wages plus the health insurance and the company's insurance expense should be reduced by the amount of health insurance reported on the W2.

[qbteachmt]

"and the company's insurance expense should be reduced by the amount of health insurance reported on the W2."

Because, for these people, you turned insurance into a Taxable Compensation Benefit. It's an offset.

[PatiP]

Thank you for the help with this!