As an S-Corp owner I receive a paycheck like the rest of my employees. For each of the following items can someone please help with the correct way to handle these:

1. Medical Premiums - as a company we pay 100% of the employee medical premiums, but the employee pays pre-tax (Section 125) for family coverage. As an owner I believe I am NOT qualified for Section 125 (pre-tax), but should I have those family cost premiums come out of my paycheck after tax or just not deal with it in payroll at all?

2. HSA Employee contributions - same question as #1. Should my employee contributions to the HSA be part of a post-tax deduction in payroll or not (again I don't believe I am allowed to do pre-tax).

3. HSA Employer contributions - we as a company contribute (let's say) $100 month to employees HSA accounts (shows up in payroll employer side/w2). Do I do the same for me?

4. 401k contributions - I believe I can do this pre-tax like everyone else and just confirming here that I would be exactly the same as employees.

Thanks in advance!

1. Medical Premiums - as a company we pay 100% of the employee medical premiums, but the employee pays pre-tax (Section 125) for family coverage. As an owner I believe I am NOT qualified for Section 125 (pre-tax), but should I have those family cost premiums come out of my paycheck after tax or just not deal with it in payroll at all?====> An S corp should treat the amount of health insurance premiums paid by the corporation to a more-than-2 percent shareholder as additional W-2 wages Medical
Premiums paid for accident and health insurance coverage for A more-than-2 percent shareholder of an S corp is generally treated as deductible expenses for the S corp and wages subject to Federal income tax (FIT) and Social Security and Medicare (FICA) taxes for the recipient shareholder unless otherwise noted.


2. HSA Employee contributions - same question as #1. Should my employee contributions to the HSA be part of a post-tax deduction in payroll or not (again I don't believe I am allowed to do pre-tax).======>>as mentioned above;
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3. HSA Employer contributions - we as a company contribute (let's say) $100 month to employees HSA accounts (shows up in payroll employer side/w2). Do I do the same for =====>> Employer contributions to the HSA of a more-than-2 % shareholder are generally treated as additional wages. They are therefore subject to FIT withholding and FICA taxes, and are deductible by the S corp. However, if the S corporation has a plan or system covering all employees or selected employees, these wages will not be subject to FICA taxes, but WILL still be subject to FIT withholding. The more-than-2 percent shareholder can also deduct the HSA contribution amounts above the line on Form 1040. The premiums can be deducted as additional wage expenses on the S corp?s Form 1120S. Furthermore, if the requirements are met, these wages are exempt from FICA taxes, but WILL still be subject to FIT withholding; the S corp must pay the health premiums under a plan or system covering all employees or selected employees while a written plan is not required, it is strongly advised that the corporation adopts one. When filing their own returns, the more-than-2% shareholder is then allowed to deduct the premiums above the line on Form 1040. However, the deduction is not allowed for amounts during a month in which the taxpayer is eligible to participate in any subsidized health plan maintained by another employer of the taxpayer or the spouse of the taxpayer. All of the above guidance also applies if the more-than-2 %shareholder pays the premiums from his or her own pocket, and is then reimbursed by the S corp.

4. 401k contributions - I believe I can do this pre-tax like everyone else and just confirming here that I would be exactly the same as employees.====>>i gues it depends; If the S-Corp pays matching contributions to you, a shareholder as part of a Safe Harbor 401k plan, then, you get the benefit of the deductable expense The matching contribution is a deduction for the S Corp and not taxable income to you, a shareholder.

The only item to report to you is the reduction of gross wages on the W2 and the entry in box 12 of the W2.
As a shareholder and an employee of the S corp. you can not contribute to the company?s 401(k) plan based on your S corp distributions; Contributions to a retirement plan can only be made from compensation. Distributions you receive as a shareholder of an S corp do not constitute earned income for retirement plan purposes;

@Wnhough Thank you!!!

A follow up question to all of these. I think I understand but this will help. For each one is there a preferred method when it comes to payroll. Specifically.

1) Medical Premiums paid by > 2% owner - after-tax deduction on payroll or just don't deal with it within the payroll?

2) HSA Employee Contributions paid by > 2% owner - same question

3) HSA Employer Contributions paid for > 2% owner- put on payroll? and therefore it will be on the W2 or don't deal with it in the payroll system at all?

4) 401k contribution for > 2% owner - sounds like it must be on the payroll (pre-tax).

Thank you so much for your help.

1) Medical Premiums paid by > 2% owner - after-tax deduction on payroll or just don't deal with it within the payroll?===> Medical Premiums paid by > 2% owner - after-tax deduction? I guess it depends; The deduction is only allowed when the plan is established by the corp. as an owner/ employee of the S corp, you can buy the plan establsihed by the corp and be reimbursed by the corp.in this case it can be on payroll under the non accountable plan. In general , the total premiums must be reported on the more than 2% shareholder?s Form W-2 in the same year the premiums are paid in order for a greater than 2% shareholder in an S corp to deduct medical insurance premiums paid by the company on their behalf and of course the deduction needs to be on payroll of the S corp; If the corp has a single employee, who is also the officer of the corp and an owner, the employee status of the officer still allows the health insurance deduction however, Health insurance is deductible for any S Corp shareholder owning more than 2 %of the company and is not covered by other health insurance. While an officer of the company would be covered as an employee and the cost of health insurance deducted as an employee benefit, the deduction can be used by other owners if the company pays for the health insurance. For non-employee owners, insurance coverage can be in the business name, or an owner can buy private coverage and be reimbursed by the company.in this case it can be on payroll under the non accountable plan.

2) HSA Employee Contributions paid by > 2% owner - same question======>Same as above.

3) HSA Employer Contributions paid for > 2% owner- put on payroll? and therefore it will be on the W2 or don't deal with it in the payroll system at all?======>correct; say , you are a more than 2 % shareholder, then contributions by your S Corp to your HSA are also deductible, in the form of compensation, by the corp.For employment tax purposes, the S Corp treats the HSA contributions as wages subject to income tax withholding but exempt from FICA and Medicare taxes.So, you need to pick up the HSA contributions as income on your W-2, you may deduct the HSA payments made by the S Corp on your Form 1040 and, effectively, you have a wash for tax purposes. But the advantage is you save on payroll taxes by having the S Corp pay your HSA.
As said, S Corp owners who pay their medical insurance premiums personally are not eligible to claim the self-employed insurance deduction on page 1 of their Form 1040. The deduction is only allowed when the plan is established by the corp.

4) 401k contribution for > 2% owner - sounds like it must be on the payroll (pre-tax).======>>correct. you need to put your amount of retirement contributions on W-2 with Code as D.it needs to set up a payroll item for retirement benefits ,i.e,401K

Thank you very much for your response.