Question

Which of the following statements is true regarding health and accident insurance premiums? A. Health and...

Which of the following statements is true regarding health and accident insurance premiums?

A. Health and accident insurance premiums for the 2% shareholders cannot be treated as wages.
B. Health and accident insurance premiums included on the 2% shareholder's Form W-2 are not subject to Social Security or Medicare withholding if they are paid pursuant to a plan.
C. Health and accident insurance premiums must be deducted on the S corporation's Form 1120S.
D. Health and accident insurance premiums must be included on the 2% shareholder's Form W-2 only if the S corporation does not have a plan for other employees
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer- option (B)

  • Health and accident insurance premiums must be included on behalf of 2% of S corporation shareholder's form W-2 and reported as wages subject to income tax withholding.
  • However these additional wages are not subject to social security or Medicare if payments of premiums are made on behalf of employees under a plan.
  • Hence the health and accident insurance premium is included in shareholder's employee box 1 (wages) of form W-2 under the head of wage and tax statement.

So option B is the most appropriate one.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2- Which of the following noncash fringe benefits are considered taxable and subject to withholding? a.qualified...
2- Which of the following noncash fringe benefits are considered taxable and subject to withholding? a.qualified transportation fringe. b.membership in a country club. c.reduced tuition for education. d.de minimis fringe benefits. 3- Which of the following items are not included in Social Security wages that are reported in Box 3 of Form W-2. a.group term life insurance premiums in excess of $50,000 of coverage. b.gross wages paid in excess of the taxable wage base for OASDI for the year. c.employer...
Which of the following medical plans represents government-based health insurance to people 65 years of age...
Which of the following medical plans represents government-based health insurance to people 65 years of age and over? long-term care insurance Social Security Medicaid Medicare Private Company HMOs The Principle of Indemnity states that insurance coverage a. should not be renewed after an adverse event occurs. b. should not be renewed at the same premium after an adverse event occurs. c. should be equal at all times to 80% of the loss or expense. d. should not be less than...
5. Rachel receives employer provided health insurance. The employer's cost of the health insurance is $5,500...
5. Rachel receives employer provided health insurance. The employer's cost of the health insurance is $5,500 annually. What is her employer's after-tax cost of providing the health insurance, assuming that the employer's marginal tax rate is 35 percent and is profitable? MULTIPLE CHOICE $0 $3,575 $4,198 $5,500 8. Meg works for Freedom Airlines in the accounts payable department. Meg and all other employees receive free flight benefits (for the employee, family, and 10 free buddy passes for friends per year)...
1. Which of the following is true regarding the French universal health coverage system? It achieves...
1. Which of the following is true regarding the French universal health coverage system? It achieves better health outcomes than in the US and is very generous to insurees. It has been struggling with rising health expenditure It faces a deficit Funding requires heavy taxation All of the above 2. Contrary to common misconceptions about public health insurance, the example of France and Canada show that Medicare for all provides full coverage does not provide full coverage results in worse...
Caribbean Tours' total payroll for the month of January was $590,000. The following withholdings, fringe benefits,...
Caribbean Tours' total payroll for the month of January was $590,000. The following withholdings, fringe benefits, and payroll taxes apply:       Federal and state income tax withheld $ 59,000         Health insurance premiums paid by employer (payable to Blue Cross) 10,620         Contribution to retirement plan paid by employer (payable to Fidelity) 23,600         FICA tax rate (Social Security and Medicare) 7.65 %   Federal and state unemployment tax rate 6.20 %    Assume that none of the withholdings or payroll...
Answer the following questions: 41.- Kathryn Holmes cumulative earnings are $45,000 and her gross pay for...
Answer the following questions: 41.- Kathryn Holmes cumulative earnings are $45,000 and her gross pay for the week is $500 if the FICA rates are Social Security 6.2% on a limit Security and FICA-Medicare taxes for the week? a) $31.00 $7.25 b) $310.00 $72.50 c) $3.10 $0.73 d) $25.50   $8.00 42.- The balance in the Salaries and Wages Payable account is equal to net pay True False 43.- The Federal Unemployment Tax is a) paid by the employer b) paid...
John Williams (birthdate August 2, 1974) is a single taxpayer, and he lives at 1324 Forest...
John Williams (birthdate August 2, 1974) is a single taxpayer, and he lives at 1324 Forest Dr., Reno, NV 89501. His Social Security number is 555-94-9358. John's earnings and withholdings as the manager of a local casino for 2016 are reported on his Form W-2: a Employee's social security number 555-94-9358 OMB No. 1545-0008 Safe, accurate, FAST! Use IRS e ~ file Visit the IRS website at www.irs.gov/efile b Employer identification number (EIN) 31-1459656 1 Wages, tips, other compensation 194,000.00...
2 . Identify which of the following statements is true: If an S Corporation has no...
2 . Identify which of the following statements is true: If an S Corporation has no accumulated earnings and profits, the amount distributed to a shareholder will not increase the shareholder's basis in the stock        If a C Corporation does not distribute its income to its shareholders, double taxation of the income will occur.        C Corporation operating losses are deductible by the individual shareholders        S Corporation operating losses are never deductible by the individual...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you choose and give reasons why you would or would not want a benefit that were used in making the benefit selections (specially at at entry level making $30000). PROCEDURES: Assume that you recently graduated from college and are just starting a new job at a large firm. You will be receiving a starting net pay (net of all taxes and mandatory deductions) of $30,000....
1. All of the following are characteristics associated with a sole proprietorship, EXCEPT: a. income and...
1. All of the following are characteristics associated with a sole proprietorship, EXCEPT: a. income and expense items are reported on Schedule C b. the owner cannot report passive losses on real estate investments on Schedule D c.​once calculated, its net income is reported on Form 1040 d.​the owner must pay self-employment taxes to fund both the Social Security and Medicare systems 2.​A sole proprietor is fully liable for the debts and obligations of the business. (True/False). 3.​Each partner in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT