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#5
11-22-2005, 08:03 AM
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 Re: LLC member health insurance deduction question. stevexue[at]gmail.com wrote: - quote - > Is it because the LLC already deducted it at the partnership
OK, now I think I see what your question is. Are you asking> level? "What's the difference between a member getting a $15k guaranteed payment, plus a $5k draw to pay health insurance personally, and a member getting a $15k guaranteed payment and the LLC paying $5k of health insurance on the member's behalf?" If so, then yes, the difference is whether the $5k is deductible at the LLC level (on the 1065). A draw wouldn't be, a guaranteed payment would be. Phoebe  << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#4
11-22-2005, 07:44 AM
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| Re: LLC member health insurance deduction question. stevexue[at]gmail.com wrote: - quote - > Then, what's the difference if the member pays the insurance
Which is $5k less than he'd have gotten if the LLC paid him> out of his pocket directly? Then he has 20000 earned income, > and then 5000 self-insured adjustment, and that's 15000 > after adjustment. it's 15000 cash plus 5000 insurance. $20k *plus* his health insurance. Therein lies the difference. Phoebe << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#3
11-20-2005, 03:56 PM
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| Re: LLC member health insurance deduction question. Is it because the LLC already deducted it at the partnership level? << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#2
11-20-2005, 03:56 PM
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| Re: LLC member health insurance deduction question. Phoebe Roberts, EA wrote: - quote - > stevexue[at]gmail.com wrote:
Thanks Phoebe for your answer.> > If the LLC pays the insurance premium on behalf of a member, > > it's considered guaranteed payment to the member. e.g. the > > member will normally earn 20000 guaranteed payment, and with > > 5000 insurance paid for him/her, this brings the total > > guaranteed payment to 25000. > So far, so good. > > And then in 1040, self-employed insurance deduction, the > > member will deduct 5000 as an adjustment to the income. But > > since now the member's earned income is 25000 instead of > > 20000, after deduction, the adjusted income is: 20000. > Yep. $20,000 in cash, and $5,000 of health insurance > taxable for SECA purposes, but not income tax purposes. > > I believe the adjusted income should be 15000, instead of > > 20000. > > > Am I missing something here? > That the member got $20k in *cash* plus $5k of insurance, > not $15k in cash. Then, what's the difference if the member pays the insurance out of his pocket directly? Then he has 20000 earned income, and then 5000 self-insured adjustment, and that's 15000 after adjustment. it's 15000 cash plus 5000 insurance. There should not be any difference. I just cannot understand that. << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#1
11-16-2005, 08:26 AM
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| Re: LLC member health insurance deduction question. stevexue[at]gmail.com wrote: - quote - > If the LLC pays the insurance premium on behalf of a member,
So far, so good.> it's considered guaranteed payment to the member. e.g. the > member will normally earn 20000 guaranteed payment, and with > 5000 insurance paid for him/her, this brings the total > guaranteed payment to 25000. - quote - > And then in 1040, self-employed insurance deduction, the
Yep. $20,000 in cash, and $5,000 of health insurance> member will deduct 5000 as an adjustment to the income. But > since now the member's earned income is 25000 instead of > 20000, after deduction, the adjusted income is: 20000. taxable for SECA purposes, but not income tax purposes. - quote - > I believe the adjusted income should be 15000, instead of
That the member got $20k in *cash* plus $5k of insurance,> 20000. > Am I missing something here? not $15k in cash. Phoebe << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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11-16-2005, 08:26 AM
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| Re: LLC member health insurance deduction question. stevexue[at]gmail.com wrote: - quote - > I stuck in this problem when I try to figure out the LLC
Like maybe trying to claim the deduction twice?> member (Self-employed person) health insurance deduction. > If the LLC pays the insurance premium on behalf of a member, > it's considered guaranteed payment to the member. e.g. the > member will normally earn 20000 guaranteed payment, and with > 5000 insurance paid for him/her, this brings the total > guaranteed payment to 25000. > And then in 1040, self-employed insurance deduction, the > member will deduct 5000 as an adjustment to the income. But > since now the member's earned income is 25000 instead of > 20000, after deduction, the adjusted income is: 20000. > I believe the adjusted income should be 15000, instead of > 20000. > Am I missing something here? << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#-1
11-14-2005, 06:32 AM
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| LLC member health insurance deduction question. I stuck in this problem when I try to figure out the LLC member (Self-employed person) health insurance deduction. If the LLC pays the insurance premium on behalf of a member, it's considered guaranteed payment to the member. e.g. the member will normally earn 20000 guaranteed payment, and with 5000 insurance paid for him/her, this brings the total guaranteed payment to 25000. And then in 1040, self-employed insurance deduction, the member will deduct 5000 as an adjustment to the income. But since now the member's earned income is 25000 instead of 20000, after deduction, the adjusted income is: 20000. I believe the adjusted income should be 15000, instead of 20000. Am I missing something here? Thanks in advance << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
| Tags |
| deduction, health, insurance, llc, member, question |
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