my accountant always says i can't

Discussion in 'Business Operations' started by ant, Jan 6, 2003.

  1. ant

    ant LawnSite Silver Member
    Messages: 2,466

    1. i work a fulltime job that pays medical/dental coverage for my family and i.

    2. i own a lawn service that i do part time with no employees

    3. my company is a s corperation

    my question is----------------------

    why do i always see some companys that can't pay there employees full benefits pay partial benefits.

    one company that a friend works for will pay for medical/dental bills that his wifes employer's plan does not cover.

    i brought this up to my accountant and told him that i would like for my company to pay for my familys medical bills that my main medical insurance will not pay.

    he said i can't.....

    the only thing i am looking to pay is balance of dental that the insurance will not pay and the same for medical...

    what doyou guys think about this?
    is he wright?
  2. turfmarketing

    turfmarketing LawnSite Member
    from Ohio
    Messages: 49


    Your accountant is right.

    According to IRS Publication 535 Business Expenses
    "You generally can deduct premiums you pay for the following kinds of insurance related to your trade or business.

    Fire, theft, flood, or similar insurance.

    Credit insurance that covers losses from business bad debts.

    Group hospitalization and medical insurance for employees, including long-term care insurance.

    If a partnership pays accident and health insurance premiums for its partners, it generally can deduct them as guaranteed payments to partners.

    If an S corporation pays accident and health insurance premiums for its 2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages subject to federal income tax withholding. See Publication 15-B."

    It's the "S" corporation status that makes it taxable to the owner or "2% shareholder" as stated above.

    I feel your pain.
  3. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    But that isn't 'can't'. That's 'Can, but at a tax penalty', if I'm reading it right.
  4. Stonewall

    Stonewall LawnSite Senior Member
    Messages: 280

    Make your wife a legitimate employee and offer medical insurance/benefits to your employee and her family.

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