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Timothy Said:

Should Health Insurance premiums for the wealthy be subsidized by the government?

We Answered:

They are in the form of massive tax writeoffs. My friend had a $22,000 wedding reception in August. He video taped it and mentioned his business. Now it is a $22,000 tax writeoff.

Agnes Said:

Does McCain want to tax employer paid health insurance?

We Answered:

Yes.. McCain wants to tax the group insurance premiums you pay through your employer. Right now they are taking from your gross pay and are not taxed. With McCain's plan they would be taxed and the $5000 tax credit would go to the insurance company. McCain also doesn't tell you that your current plan costs approximately $12000 a year, so you will have to figure out how to come up with $7000 to cover the rest. NOT to mention, the insurance companies will do what some banks and corporations, they will find a state where they are required to provide coverage for certain things ( like check ups, mammograms, etc). Then they will fill their charts in those states, so your coverage will not have those. Banks and corporations love to register in Delaware, because certain breaks they get there.

In a nut shell, you will pay taxes on the premium you currently don't pay on, the coverage will not be as good and you will have to make the difference in your premium. Is that what you want???

Through my husband employer health care we pay $2500( tax free) and have a really good plan -- the prescription copay could be better, but at least we have it. God only knows what will happen with McCain's plan.

Ernest Said:

1099-R Didn't tell bank it would be used for health insurance premiums?

We Answered:

See Form 5329

The distribution is still taxable. If you were unemployed and you used the money to pay health insurance premiums, you do not have to pay the 10% penalty but the withdrawal is still taxable.

William Said:

Can an S-Corp shareholder's wife claim health insurance deduction on her W2 if she is not shareholder?

We Answered:

Yes, she is by definition a related party
Taxable income to her but can deduct premiums from AGI as self-employed

Marc Said:

S-Corp Health- Added to Gross Income - Taxable??

We Answered:

As a more than 2% owner of an S corporation, your health insurance premiums are not deductible by the corporation, at least not as insurance or fringe benefits.

Rather, the premiums are added to your gross pay and are deducted as officer salary on the 1120S. The premiums should be included on your 941 returns, and your W-2. They are not, however, subject to fica or futa taxes.

The total federal wages on your W-2, which includes the premiums, are entered as wages on line 7 of your 1040. Assuming you have fica wages at least equal to the insurance premiums, you then claim the self-employed health insurance deduction on your 1040 for the amount of the premiums.

Eleanor Said:

Are insurance premiums paid through a part time job considered income by Social Security?

We Answered:

Social Security uses the highest figure on your W2 form to apply the annual earnings test. The premiums may not show up in Federal wages and other compensation, but might show up in another block on the W2. If so, they will count.