Below is information about S CORPORATION OFFICER FRINGE BENEFITS from a variety of sources. Please take a look at the materials that our team has selected for you.
https://www.upcounsel.com/s-corp-fringe-benefits#:~:text=S%20corp%20fringe%20benefits%20refer%20to%20additional%20benefits,flow%20through%20to%20its%20shareholders%27%20personal%20tax%20returns.
https://www.upcounsel.com/s-corp-fringe-benefits
Which Fringe Benefits Are Taxable? Two-percent shareholders in an S corporation are required to pay taxes on the following fringe benefits: Premiums for group-term life insurance coverage worth up to $50,000. Premiums for health, accident, disability, and long-term care insurance. Meals and lodging provided for the employer's convenience.
https://dmlo.com/fringe-benefits-rules-for-s-corporation-shareholders/
employee achievement awards, qualified transportation fringe benefits, qualified adoption assistance, qualified moving expense reimbursements, personal use of employer-provided property or services, and meals and lodging furnished for the convenience of the employer must be included as compensation when made available to 2% s corporation …
https://www.thetaxadviser.com/issues/2011/dec/case-study-dec11.html
In an S corporation, employee fringe benefits paid on behalf of a 2% shareholder are subject to special rules. Sec. 1372 (a) states that for fringe benefit purposes, an S corporation “shall be treated as a partnership” and a 2% shareholder “shall be treated as a partner of such partnership.”
https://www.ktllp.com/s-corporation-fringe-benefits/
Let’s take a closer look at some of the most common favorable fringe benefits. 1 . Health Insurance In order for a 2% shareholder in an S Corporation to receive a full deduction for health insurance premiums paid on behalf of the employee, the employee’s spouse, or their dependents, the following steps must be followed:
https://www.lustertc.com/blog/s-corp-fringe-benefits
The stinky fringe benefit gives your S corporation a tax deduction for the compensation that it includes on your W-2. Effectively, this gives you a zero-tax benefit from the stinky fringe benefit. The stinky fringe benefit increases the corporation’s FICA taxes on the compensation it has to add to your W-2.
https://www.troutcpa.com/blog/common-fringe-benefits-rules-for-2-s-corp-shareholders-and-changes-under-the-cares-act
Common Employee Fringe Benefits Employer-paid group-term life insurance coverage: Up to $50,000 of group-term life insurance coverage is excluded from tax, and any amount in excess of $50,000 must be included in an employee’s taxable income and is subject to Social Security and Medicare taxes (FICA).
http://scorporationsexplained.com/tax-free-fringe-benefits.htm
An S corporation cannot provide as many tax-free fringe benefits to shareholders-employees as a traditional "C" corporation can. Nevertheless, an S corporation may still provide a number of tax-free benefits to S corporation shareholder-employees, including the following: Qualified Retirement Plans
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues
S Corporation Compensation and Medical Insurance Issues When computing compensation for employees and shareholders, S corporations may run into a variety of issues. The information below may help to clarify some of these concerns. Reasonable Compensation Treating Medical Insurance Premiums as Wages Health Insurance Purchased in Name of Shareholder
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-employees-shareholders-and-corporate-officers
Such payments to the corporate officer are treated as wages. Courts have consistently held S corporation officers/shareholders who provide more than minor services to their corporation and receive, or are entitled to receive, compensation are subject to federal employment taxes.
https://www.thebalancesmb.com/deductible-fringe-benefits-executives-397603
Employee benefits ( fringe benefits) are often deductible to employers and they are sometimes taxable to employees. Companies are very creative in finding ways to compensate executives and high paid employees with a variety of these "fringe" benefits.
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