S Corp business owners, you can deduct the health insurance you pay for yourself and your dependents, but the IRS requires specific reporting. The amount needs to be reported as part of your payroll and then deducted on your personal return. If this amount isn’t already set up with your payroll company,
WHAT YOU NEED TO DO is provide them a total for the current year and let them know it should be reported as “Shareholder Health Insurance”. For example, you’ve been paying $500/month for health insurance for yourself and your spouse to Blue Cross. You just need to let your payroll service know that you need to report $6K (annual total) as Shareholder Health Insurance. This should not have any taxes deducted or result in any check it will just allow us to deduct the expenses in the correct way—so don’t miss out on this deduction! You will want to get this information to your service prior to the last pay run for the year.
Let us know if you have questions.
