S Corporation Medical Insurance Premiums

If you own more than 2% of an S Corporation then you need to be aware of the following.  

Health and accident insurance premiums paid by your corporation on your behalf must be reported as income on your annual Form W-2.  If the insurance premiums are not included in the W-2 then the IRS will not allow the corporation to deduct them.  The Shareholder, in most cases, is allowed to have an equal deduction on their individual tax returns.  At the end of the day, there is no impact other than the additional headache of getting the amounts reported correctly on the W-2.

One thing to be aware of is that amounts added to the W-2 should not be subject to any payroll taxes.

If this affects you and you would like additional information on how to report company paid health insurance premiums, or if you are a greater than two percent S corporation shareholder receiving this taxable income and would like information about what this means to you, please contact us at info@tysllp.com.

Thanksgiving Holiday Office Closure

 

In observance of the Thanksgiving holiday, our offices will close starting at Noon on Wednesday, November 21, 2012.

 

We will re-open on Monday, November 26, 2012.

 

Happy Thanksgiving!

Applicable Federal Rates for November 2012

The Applicable Federal Rates (AFRs) for the month of November are as follows:

 

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.24%	0.24%	0.24%	0.24%
Mid-term (>3 years but ≤9 years)	0.98%	0.98%	0.98%	0.98%
Long-term (>9 years)	2.84%	2.82%	2.81%	2.80%

 

Applicable Federal Rates (AFRs) for October

The Applicable Federal Rates (AFRs) for the month of October are as follows:

 

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.23%	0.23%	0.23%	0.23%
Mid-term (>3 years but ≤9 years)	1.04%	1.04%	1.04%	1.04%
Long-term (>9 years)	2.87%	2.85%	2.84%	2.83%

 

Applicable Federal Rates for September

The Applicable Federal Rates (AFRs) for the month of September are as follows:

 

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.23%	0.23%	0.23%	0.23%
Mid-term (>3 years but ≤9 years)	0.95%	0.95%	0.95%	0.95%
Long-term (>9 years)	2.80%	2.78%	2.77%	2.76%

 

Holiday Office Hours for Labor Day

In observance of the Labor Day Holiday, tys, llp offices will close at 12:00pm on Friday, August 31 2012.

We will re-open Tuesday, September 4, 2012.

Have a safe and happy holiday!

Applicable Federal Rates (AFRs) for August

The Applicable Federal Rates (AFRs) for the month of August are as follows:

 

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.25%	0.25%	0.25%	0.25%
Mid-term (>3 years but ≤9 years)	1.07%	1.07%	1.07%	1.07%
Long-term (>9 years)	3.01%	2.99%	2.98%	2.97%

STUDENT LOAN INTEREST RELIEF

HIGHWAY BILL WITH STUDENT LOAN INTEREST RELIEF AND PENSION CHANGES SIGNED INTO LAW.


On July 6, President Obama signed into law H.R. 4348, the “Moving Ahead for Progress in the 21st Century Act” (“the Act”). The Act was approved by both the House and Senate on June 29th. Among other things, the Act authorizes various highway and transportation funding for two years and includes a provision to prevent an increase in the student loan interest rates. The Act also includes a number of pension-related tax changes, including a funding break for employers with pension plans, an extension of a provision allowing excess pension assets to be used for future retiree health benefits, and a new provision allowing excess pension assets to be used for certain retiree life insurance.

Applicable Federal Rates (AFRs) for July

The Applicable Federal Rates (AFRs) for the month of July are as follows:

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.27%	0.27%	0.27%	0.27%
Mid-term (>3 years but ≤9 years)	1.05%	1.05%	1.05%	1.05%
Long-term (>9 years)	3.02%	3.00%	2.99%	2.98%

4th of July Holiday Office Hours

In observance of the 4th of July Holiday, tys, llp offices will close at 12:00pm on Tuesday, July 3, 2012.

We will re-open Thursday, July 5, 2012.

Please have a safe and happy holiday!

Applicable Federal Rates (AFRs) for June

The Applicable Federal Rates (AFRs) for the month of June are as follows:

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.26%	0.26%	0.26%	0.26%
Mid-term (>3 years but ≤9 years)	1.16%	1.16%	1.16%	1.16%
Long-term (>9 years)	3.06%	3.04%	3.03%	3.02%

Applicable Federal Rates (AFRs) for May

The Applicable Federal Rates (AFRs) for the month of May are as follows:

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤3 years)	0.27%	0.27%	0.27%	0.27%
Mid-term (>3 years but ≤9 years)	1.30%	1.30%	1.30%	1.30%
Long-term (>9 years)	3.26%	3.23%	3.22%	3.21%