The recently passed tax-reform law has a lot to say about fringe benefits for shareholder-employees who own more than 2-percent of their S corporations.
The good news?
Federal tax law lets you treat the cost of fringe benefits as deductible expenses for your S corporation.
The bad news?
If you’re a more than 2-percent shareholder, you may have to pay additional taxes on some of the benefits. (That’s because the tax code requires your corporation to put selected benefits on your W-2 and subjects these selected benefits to FICA taxes.)
If this all sounds complicated, that’s because it is. And that’s why it’s important for you to read this new issue of the Tax Reduction Letter. In it, we’ll explain the good, the bad, and the (very) ugly.
You‘ll get all the details when you read my new article titled S Corporation Fringe Benefits after the Recent Tax Reform.
Three ways our fact-filled article can help you:
- We’ll explain the tax treatment of four beneficial (but somewhat crazy) fringe benefits. These include:
- Health insurance
- Health reimbursement arrangements (HRAs)
- Health savings accounts (HSAs)
- Disability insurance
These four fringe benefits enter a tax-code maze and eventually come out the other end in your favor. But you have to know how to play the game. We’ll show you how when you read the full after-tax-reform article.
- We’ll warn you about six stinky fringe benefits. Stinky because you’ll get nothing from these not-for-you benefits. And worse, you’ll pay extra taxes too because you’re a more than 2-percent shareholder-employee. We’ll cover:
- Group term life insurance
- Qualified moving expense reimbursements
- Qualified transportation fringe benefits
- Meals and lodging
- Qualified employee achievement programs
- Three maybe (and maybe not) fringe benefits
You’ll get the whole story when you read the full after-tax-reform article.
- We’ll give you details about four “no problem” fringe benefits. Here’s some good news. Your S corporation can provide you (as a more than 2-percent shareholder employee) and other employees with some nice benefits — benefits that are tax free to employees and are deductible by the S corporation. We’ll cover:
- De minimis fringe benefits
- No-additional-cost services
- Qualified employee discounts
- On-premises athletic facilities
We’ll give you full details when you read the full after-tax-reform article.