{"id":14031,"date":"2023-10-22T09:23:51","date_gmt":"2023-10-22T15:23:51","guid":{"rendered":"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/"},"modified":"2026-01-26T17:11:51","modified_gmt":"2026-01-26T17:11:51","slug":"tax-savings-with-health-insurance","status":"publish","type":"epkb_post_type_1","link":"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/","title":{"rendered":"Tax Savings with Health Insurance"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-right counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table Of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/#40_Reasonable_Salary_With_Health_Insurance\" >40% Reasonable Salary, With Health Insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/#35_Reasonable_Salary_Without_Health_Insurance\" >35% Reasonable Salary, Without Health Insurance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/#Taxpayers_Comprehensive_Guide_to_LLCs_and_S_Corps_2025_Edition\" >Taxpayer\u2019s Comprehensive Guide to LLCs and S Corps 2025 Edition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/#Talk_to_a_Small_Business_CPA_About_Your_Situation\" >Talk to a Small Business CPA About Your Situation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/#Schedule_Discovery_Meeting_Now\" >Schedule Discovery Meeting Now<\/a><\/li><\/ul><\/nav><\/div>\n<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text css=&#8221;&#8221; woodmart_inline=&#8221;no&#8221; text_larger=&#8221;no&#8221;]<img decoding=\"async\" class=\"size-full wp-image-31381 alignright\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/015336_249724033_tax_savings_with_health_300.jpg\" alt=\"\" width=\"300\" height=\"200\" \/>By <strong>Jason Watson, CPA<\/strong><br \/>\nPosted Monday, October 23, 2023<\/p>\n<p>When your S corporation pays for your self-employed health insurance (SEHI) and dental \/ vision premiums, including coverage for your family, that amount is added to Box 1 Wages on your W-2. So, your income is artificially increased by the annual amount of premiums. However, there are two huge concepts you need to love and embrace.<\/p>\n<p>First, Box 3 Social Security Wages and Box 5 Medicare Wages do not get increased by the amount of premiums paid. Here is a silly looking, but illustrative W-2.<\/p>\n<table style=\"width: 80%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left; width: 34%;\">Box 1 Wages<\/td>\n<td style=\"text-align: center; width: 15%;\">50,000<\/td>\n<td style=\"width: 2%;\"><\/td>\n<td style=\"text-align: left; width: 34%;\">Box 2 Federal Tax Withholdings<\/td>\n<td style=\"text-align: center; width: 15%;\">21,735<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 34%;\">Box 3 Social Security Wages<\/td>\n<td style=\"text-align: center; width: 15%;\"><span style=\"color: #0000ff;\"><strong>40,000<\/strong><\/span><\/td>\n<td style=\"width: 2%;\"><\/td>\n<td style=\"text-align: left; width: 34%;\">Box 4 SS Withholdings<\/td>\n<td style=\"text-align: center; width: 15%;\">2,480<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 34%;\">Box 5 Medicare Wages<\/td>\n<td style=\"text-align: center; width: 15%;\"><span style=\"color: #0000ff;\"><strong>40,000<\/strong><\/span><\/td>\n<td style=\"width: 2%;\"><\/td>\n<td style=\"text-align: left; width: 34%;\">Box 6 Medicare Withholdings<\/td>\n<td style=\"text-align: center; width: 15%;\">580<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 34%;\">Box 16 State Wages<\/td>\n<td style=\"text-align: center; width: 15%;\">50,000<\/td>\n<td style=\"width: 2%;\"><\/td>\n<td style=\"text-align: left; width: 34%;\">Box 17 State Tax Withholdings<\/td>\n<td style=\"text-align: center; width: 15%;\">4,347<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Don\u2019t get tweaked on the federal and state tax withholdings. We\u2019ll explain that in a later chapter.<\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>Spoiler alert:<\/strong><\/span> When WCG processes shareholder payroll, we increase income tax withholdings to help budget for the K-1 income that is combined with your W-2 income on your individual tax return). This allows you to land on tax neutrality as a household without needing separate estimated tax payments. Beauty!<\/p>\n<p>Back to the W-2. Your focus should be on Box 3 and Box 5- these are the boxes that we want to reduce to the best of our abilities and with reasonableness.<\/p>\n<p>Subsequently Box 4 and Box 6 is the calculation of the Social Security and Medicare taxes based on the amounts in Box 3 and Box 5. As you can see, your compensation is $50,000 but only $40,000 is being used to compute Social Security and Medicare taxes. Why is this? Some taxable fringe benefits, such as health care benefits (self-employed health insurance premiums and HSA contributions), are only added to Box 1 Wages, and not Box 3 or Box 5. Boom!<\/p>\n<p>Explained another way; if we all decide that $50,000 is reasonable shareholder salary, and your self-employed health insurance premiums are $10,000, then only $40,000 is ran through payroll. But, the $40,000 and the $10,000 are combined to reflect total shareholder salary.<\/p>\n<p>How does this translate to the corporate tax return? Line 7 of Form 1120S is \u201cCompensation of officers\u201d and the $50,000 in Box 1 above would be entered there (we\u2019ll chat about the effects of solo 401k plan deferrals in a bit). Line 21 of Form 1120S is \u201cOrdinary business income.\u201d Line 7 as compared to Line 21 is one of the ways the IRS will consider a challenge of your S corporation with respect to reasonable shareholder salary (the IRS also looks at your K-1, specifically Box 16 Code D, as compared to your W-2, both connected by your Social Security Number).<\/p>\n<p>Got it? Good. Next concept.<\/p>\n<p>The second concept is that self-employed health insurance (SEHI) premiums are effectively deducted on Line 7 of Form 1120S as Officer Compensation. Therefore, the salary paid to the shareholders plus health insurance directly reduces Line 21 on Form 1120S which is your taxable ordinary income generated by the S corporation.<\/p>\n<p>However, your W-2 shows $50,000 in taxable wages and this will appear on Line 1 of page 1 on your Form 1040. Hmmm\u2026 how does that work? We know what you are thinking- you are paying income taxes on the full $50,000 since the W-2 shows $50,000 but you were paid $40,000. Where are the tax savings?<\/p>\n<p>This concern would be true except that you are considered self-employed as a greater than 2% shareholder, and therefore the health insurance premiums are deducted on Line 16 on Schedule 1 of your Form 1040 as an adjustment to income. This is a dollar-for-dollar reduction in your gross income to arrive at your adjusted gross income (AGI) on Line 8b.<\/p>\n<p>Just to reiterate- the deduction and subsequent tax benefit of self-employed health insurance (SEHI) is done on the S corporation tax return. The deduction appears on your individual tax return, but it is a net zero as we\u2019ve illustrated above (we accountants call this an in and out\u2026 income comes in, but is adjusted out for a net zero effect).<\/p>\n<p>Said in another way; salary and health insurance end up as Officer Compensation and are deducted together on the S Corp tax return. This amount appears again on your individual tax return, but you get a \u201creduction\u201d for the health insurance component. Deduction on business return. Net zero on individual tax return.<\/p>\n<p>If this doesn\u2019t resonate quite yet, don\u2019t worry. However, we have seen this screwed up several times when clients run their own payroll and \/ or prepare their own individual tax returns. Be aware and know that you should have a Line 16 entry on Schedule 1 of your Form 1040 if you are paying self-employed health insurance premiums.<\/p>\n<p>To make things even stranger, a lot of taxpaying citizens are accustomed to health insurance either being 100% provided by their employer or a payroll deduction in some fashion. This works well for employees since the payroll deduction is usually pre-tax and therefore the tax benefit is immediate However, for the employee turned S Corp owner, this can be a small derailment during the transition.<\/p>\n<p>To recap- we have an artificial increase in salary by the amount of SEHI and our reasonable shareholder salary testing is improved, but Social Security and Medicare taxes are computed on a lessor amount. Winner winner chicken dinner!<\/p>\n<p>Another way to view your self-employment health insurance is that it is costing you about 60 cents on the dollar. 15 cents in less payroll taxes and another 25 cents in income tax savings. This might not make you feel better given the massive cost of health insurance, but here it is just the same.<\/p>\n<p>There are more examples of this stuff in a later chapter dedicated to reasonable shareholder salary. Also, the handling of self-employed health insurance in this manner is encouraged by the IRS as outlined in <a href=\"https:\/\/www.irs.gov\/pub\/irs-news\/fs-08-25.pdf\" target=\"_blank\" rel=\"noopener\">Fact Sheet 2008-25<\/a>.<\/p>\n<p>Here is the blurb if you can\u2019t get enough-<\/p>\n<p style=\"margin-left: 40px;\">The health and accident insurance premiums paid on behalf of the greater than 2 percent S corporation shareholder-employee are deductible by the S corporation as fringe benefits and are reportable as wages for income tax withholding purposes on the shareholder-employee\u2019s Form W-2. They are not subject to Social Security or Medicare (FICA) or Unemployment (FUTA) taxes. Therefore, this additional compensation is included in Box 1 (Wages) of the Form W-2, Wage and Tax Statement, issued to the shareholder, but would not be included in Boxes 3 or 5 of Form W-2.<\/p>\n<p style=\"margin-left: 40px;\">A 2-percent shareholder-employee is eligible for an AGI deduction for amounts paid during the year for medical care premiums if the medical care coverage is established by the S corporation.\u00a0\u00a0 Previously, \u201cestablished by the S corporation\u201d meant that the medical care coverage had to be in the name of the S corporation.<\/p>\n<p style=\"margin-left: 40px;\">In Notice 2008-1, the IRS stated that if the medical coverage plan is in the name of the 2percent shareholder and not in the name of the S corporation, a medical care plan can be considered to be established by the S corporation if: the S corporation either paid or reimbursed the 2percent shareholder for the premiums and reported the premium payment or reimbursement as wages on the 2percent shareholder\u2019s Form W-2.<\/p>\n<p style=\"margin-left: 40px;\">Payments of the health and accident insurance premiums on behalf of the shareholder may be further identified in Box 14 (Other) of the Form W-2. Schedule K-1 (Form 1120S) and Form 1099 should not be used as an alternative to the Form W-2 to report this additional compensation.<\/p>\n<p>That was IRS Fact Sheet 2008-25 which can be downloaded here-<\/p>\n<p><a href=\"https:\/\/www.irs.gov\/pub\/irs-news\/fs-08-25.pdf\" target=\"_blank\" rel=\"noopener\">wcginc.com\/8247<\/a><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>Big Alert:<\/strong> <\/span>If you have access to health insurance through your spouse, you generally cannot do two things. You cannot get your own health insurance coverage and have it be a tax deduction for the business. You also cannot consider the additional premium paid by your spouse as a reimbursement and therefore deduction for the business (typically this is already tax-advantaged since it deducted pre-tax by your spouse on their paycheck).<\/p>\n<p>Here is a summary of the savings assuming a 40% salary and a $10,000 annual health insurance premium.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"40_Reasonable_Salary_With_Health_Insurance\"><\/span>40% Reasonable Salary, With Health Insurance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The following table highlights the significant savings when factoring self-employed health insurance into the reasonable salary calculations.<\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"vertical-align: bottom; text-align: left; width: 18%;\" width=\"16%\"><strong>Income<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Total<br \/>\nSE Tax<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Salary<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Total<br \/>\nPayroll Tax<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Delta<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 10%;\" width=\"16%\"><strong>Delta%<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">30,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">4,239<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">2,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">306<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">3,933<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">13.1%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">50,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">7,065<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">1,530<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">5,535<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">11.1%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">75,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,597<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">20,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">3,060<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">7,537<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">10.0%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">100,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">14,130<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">30,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">4,590<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">9,540<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">9.5%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">150,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">18,711<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">50,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">7,650<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">11,061<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">7.4%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">200,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">20,050<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">70,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,710<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">9,340<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">4.7%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">300,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">22,972<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">110,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">16,830<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">6,142<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">2.0%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">500,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">29,991<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">190,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">20,204<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">9,787<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">2.0%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"35_Reasonable_Salary_Without_Health_Insurance\"><\/span>35% Reasonable Salary, Without Health Insurance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As mentioned, the previous illustrations are based on a reasonable salary that was 40% of the net ordinary business income after expenses and deductions. If your reasonable S Corp salary is less than this, your savings increase. For grins, the table below shows the results and subsequent savings using a 35% reasonable salary figure. Check out the $150,000 figure! $10k in savings.<\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"vertical-align: bottom; text-align: left; width: 18%;\" width=\"16%\"><strong>Income<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Total<br \/>\nSE Tax<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Salary<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Total<br \/>\nPayroll Tax<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 18%;\" width=\"16%\"><strong>Delta<\/strong><\/td>\n<td style=\"vertical-align: bottom; text-align: center; width: 10%;\" width=\"16%\"><strong>Delta%<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">30,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">4,239<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,500<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">1,607<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">2,632<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">8.8%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">50,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">7,065<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">17,500<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">2,678<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">4,387<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">8.8%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">75,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,597<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">26,250<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">4,016<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">6,581<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">8.8%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">100,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">14,130<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">35,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">5,355<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">8,775<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">8.8%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">150,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">18,711<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">52,500<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">8,033<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,679<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">7.1%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">200,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">20,050<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">70,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,710<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">9,340<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">4.7%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">300,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">22,972<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">105,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">16,065<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">6,907<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">2.3%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 18%;\" width=\"16%\">500,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">29,991<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">175,000<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">19,769<\/td>\n<td style=\"text-align: center; width: 18%;\" width=\"16%\">10,222<\/td>\n<td style=\"text-align: center; width: 10%;\" width=\"16%\">2.0%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The salary calculation part of running an S Corp is one of the biggest challenges, but it also allows for most wiggle room for argument if necessary. Our chapter on S Corp salary will touch on the various tools we use to determine a reasonable shareholder salary including-<\/p>\n<ul>\n<li>IRS Revenue Ruling 74-44<\/li>\n<\/ul>\n<ul>\n<li>IRS Fact Sheet 2008-25<\/li>\n<\/ul>\n<ul>\n<li>Tax Court Cases<\/li>\n<\/ul>\n<ul>\n<li>Bureau of Labor Statistics \/ <a href=\"https:\/\/www.rmahq.org\/Default.aspx\" target=\"_blank\" rel=\"noopener\">Risk Management Association<\/a> Data<\/li>\n<\/ul>\n<ul>\n<li><a href=\"https:\/\/www.rcreports.com\/\" target=\"_blank\" rel=\"noopener\">RCReports<\/a><\/li>\n<\/ul>\n<ul>\n<li>Rules of Thumb (Biz Valuation, 1\/3 1\/3 1\/3)<\/li>\n<\/ul>\n<p>Here is some initial food for thought from a 2013 Tax Court case-<\/p>\n<p><a href=\"https:\/\/wcginc.com\/TCSummaryOpinion-2013-62.pdf\" target=\"_blank\" rel=\"noopener\">Sean McAlary Ltd. Inc. v. Commissioner, TC Summary Opinion 2013-62<\/a>&#8211; the IRS hired a valuation expert to determine that a real estate agent should have been paid $100,755 salary out of his S Corp\u2019s net income of $231,454. Not bad. He still took home over $130,000 in K-1 income and avoided some self-employment taxes. The valuation expert had used Bureau of Labor Statistics data to determine the average salary for real estate agents in the taxpayer\u2019s zip code.<\/p>\n<p>Here is the entire Tax Court summary opinion-<\/p>\n<p><a href=\"https:\/\/wcginc.com\/wp-content\/documents\/SeanMcAlary_TaxCourtSummaryOpinion-2013-62.pdf\" target=\"_blank\" rel=\"noopener\">wcginc.com\/8244<\/a><\/p>\n<p>Please don\u2019t be that guy who extrapolates or basically twists the previous Tax Court case into something else. BLS data is only one aspect of determining a reasonable salary. As mentioned, there is more on the salary stuff in a later chapter and pinning your entire argument on BLS data might leave money on the table.<\/p>\n<p>Until then, consider the following summary which outlines the savings using various net ordinary business income after expenses and deductions, and reasonable shareholder salaries paid (including one with self-employed health insurance)-<\/p>\n<table style=\"width: 80%;\">\n<tbody>\n<tr>\n<td style=\"width: 25%; vertical-align: bottom; text-align: left;\"><strong>Net Biz Income<\/strong><\/td>\n<td style=\"text-align: center; width: 25%; vertical-align: bottom;\"><strong>40% Salary<br \/>\nNo Health Ins.<\/strong><\/td>\n<td style=\"text-align: center; width: 25%; vertical-align: bottom;\"><strong>40% Salary<br \/>\n$10k Health Ins.<\/strong><\/td>\n<td style=\"text-align: center; width: 25%; vertical-align: bottom;\"><strong>35% Salary<br \/>\nNo Health Ins.<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">30,000<\/td>\n<td style=\"text-align: center; width: 25%;\">2,403<\/td>\n<td style=\"text-align: center; width: 25%;\">3,933<\/td>\n<td style=\"text-align: center; width: 25%;\">2,632<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">50,000<\/td>\n<td style=\"text-align: center; width: 25%;\">4,005<\/td>\n<td style=\"text-align: center; width: 25%;\">5,535<\/td>\n<td style=\"text-align: center; width: 25%;\">4,387<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">75,000<\/td>\n<td style=\"text-align: center; width: 25%;\">6,007<\/td>\n<td style=\"text-align: center; width: 25%;\">7,537<\/td>\n<td style=\"text-align: center; width: 25%;\">6,581<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">100,000<\/td>\n<td style=\"text-align: center; width: 25%;\">8,010<\/td>\n<td style=\"text-align: center; width: 25%;\">9,540<\/td>\n<td style=\"text-align: center; width: 25%;\">8,775<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">150,000<\/td>\n<td style=\"text-align: center; width: 25%;\">9,531<\/td>\n<td style=\"text-align: center; width: 25%;\">11,061<\/td>\n<td style=\"text-align: center; width: 25%;\">10,679<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">200,000<\/td>\n<td style=\"text-align: center; width: 25%;\">7,810<\/td>\n<td style=\"text-align: center; width: 25%;\">9,340<\/td>\n<td style=\"text-align: center; width: 25%;\">9,340<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">300,000<\/td>\n<td style=\"text-align: center; width: 25%;\">4,798<\/td>\n<td style=\"text-align: center; width: 25%;\">6,142<\/td>\n<td style=\"text-align: center; width: 25%;\">6,907<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%; text-align: left;\">500,000<\/td>\n<td style=\"text-align: center; width: 25%;\">9,497<\/td>\n<td style=\"text-align: center; width: 25%;\">9,787<\/td>\n<td style=\"text-align: center; width: 25%;\">10,222<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Good stuff!<\/p>\n<p>Why are we belaboring the heck out of this? In other words, does payroll really need to be dialed in this tightly? Consider that paying a salary which is $10,000 too high will cost you $1,530 in unnecessary payroll taxes. Read that again. If you paid yourself $100,000 when a reasonable salary could have been $80,000, you paid $3,060 too much in payroll taxes. What would you rather spend $3,060 on? Lots!<\/p>\n<p>So, payroll calculations need to be just a bit tighter than bar napkin quality and just a hair below NASA precision.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=&#8221;25px&#8221;][vc_column_text]<style data-type=\"vc_shortcodes-custom-css\">#wd-6915e3dd2a9b5 .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-6915e3dd2a9b5 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-6915e437409dd .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-6915e437409dd .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68460c16bff16 .info-box-title{line-height:60px;font-size:50px;color:#473d3c;}#wd-68460c16bff16 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b937e0887f .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b937e0887f .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-687b9384e0d51 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b9384e0d51 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-687b938a8f4b3 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b938a8f4b3 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68bcfccd83cf7 .info-box-title{line-height:46px;font-size:36px;color:#473d3c;}#wd-68bcfccd83cf7 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}@media (max-width: 1199px) {#wd-6915e3dd2a9b5 .info-box-title{line-height:34px;font-size:24px;}#wd-6915e3dd2a9b5 .info-box-inner{line-height:24px;font-size:14px;}#wd-6915e437409dd .info-box-title{line-height:34px;font-size:24px;}#wd-6915e437409dd .info-box-inner{line-height:24px;font-size:14px;}#wd-68460c16bff16 .info-box-title{line-height:50px;font-size:40px;}#wd-687b937e0887f .info-box-title{line-height:25px;font-size:15px;}#wd-687b9384e0d51 .info-box-title{line-height:25px;font-size:15px;}#wd-687b938a8f4b3 .info-box-title{line-height:25px;font-size:15px;}#wd-68bcf7fc8516a .info-box-title{line-height:34px;font-size:24px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfccd83cf7 .info-box-title{line-height:36px;font-size:26px;}#wd-68bcfccd83cf7 .info-box-inner{line-height:24px;font-size:14px;}}@media (max-width: 767px) {#wd-6915e3dd2a9b5 .info-box-title{line-height:28px;font-size:18px;}#wd-6915e3dd2a9b5 .info-box-inner{line-height:24px;font-size:14px;}#wd-6915e437409dd .info-box-title{line-height:28px;font-size:18px;}#wd-6915e437409dd .info-box-inner{line-height:24px;font-size:14px;}#wd-68460c16bff16 .info-box-title{line-height:40px;font-size:30px;}#wd-687b937e0887f .info-box-title{line-height:24px;font-size:14px;}#wd-687b9384e0d51 .info-box-title{line-height:24px;font-size:14px;}#wd-687b938a8f4b3 .info-box-title{line-height:24px;font-size:14px;}#wd-68bcf7fc8516a .info-box-title{line-height:28px;font-size:18px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfccd83cf7 .info-box-title{line-height:28px;font-size:18px;}#wd-68bcfccd83cf7 .info-box-inner{line-height:24px;font-size:14px;}}<\/style><div class=\"wpb-content-wrapper\">[vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6915e3dd2a9b5\" class=\" wd-rs-6915e3dd2a9b5 wd-info-box wd-wpb text-center box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p style=\"text-align: center;\"><em>Jason Watson, CPA, is a Partner and the CEO of <strong>WCG CPAs &amp; Advisors<\/strong>, a boutique yet progressive tax, accounting and business consultation firm located in Colorado serving small business owners and taxpayers worldwide.<\/em><\/p>\n<div style=\"display: flex; justify-content: center;\"><a href=\"https:\/\/www.linkedin.com\/in\/jason-watson-cpa\/\"><img decoding=\"async\" class=\"alignnone wp-image-17327 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/linkedin-150x150-1.png.webp\" alt=\"Jason Watson CPA LinkedIn\" \/><\/a>\u00a0\u00a0\u00a0\u00a0\u00a0<a href=\"mailto:jason@wcginc.com\"><img decoding=\"async\" class=\"alignnone size-thumbnail wp-image-17334 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/mail-150x150-1.png.webp\" alt=\"Jason Watson CPA Email\" \/><\/a><\/div>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6915e437409dd\" class=\" wd-rs-6915e437409dd wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Taxpayers_Comprehensive_Guide_to_LLCs_and_S_Corps_2025_Edition\"><\/span>Taxpayer\u2019s Comprehensive Guide to LLCs and S Corps 2025 Edition<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p><img decoding=\"async\" class=\"size-full wp-image-31529 alignnone\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/LLC-S-Corp-Web-and-Social-GFX_275-250x300-1.webp\" alt=\"Taxpayer\u2019s Comprehensive Guide to LLCs and S Corps 2025 Edition\" width=\"250\" height=\"300\" \/>This KB article is an excerpt from our 420+ page book (some picture pages, but no scatch and sniff) which is available in paperback from\u00a0<a href=\"https:\/\/www.wcginc.com\/amazon\" target=\"_blank\" rel=\"noopener\">Amazon<\/a>, as an eBook for\u00a0<a href=\"https:\/\/www.wcginc.com\/kindle\" target=\"_blank\" rel=\"noopener\">Kindle<\/a>\u00a0and as a\u00a0<a href=\"https:\/\/www.wcginc.com\/pdf\" target=\"_blank\" rel=\"noopener\">PDF<\/a>\u00a0from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or\u00a0<a href=\"https:\/\/wcginc.com\/business-services\/book\/\" target=\"_blank\" rel=\"noopener\">visit our webpage<\/a>\u00a0which provides more information.<\/p>\n<table class=\"purchase-table\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><a href=\"\/amazon\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6657 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/amazon-imageresized.png.webp\" alt=\"LLCs and S Corp Book Amazon\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/kindle\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6658\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/kindle-imageresized.png.webp\" alt=\"LLCs and S Corp Book Kindle\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/pdf\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6659 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/PDFresized.png.webp\" alt=\"LLCs and S Corp Book PDF\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><strong>$49.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$39.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$29.95<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" el_id=\"consultation-secc\" woodmart_css_id=\"6756f7d427735\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzU2ZjdkNDI3NzM1Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c2ba6365\" class=\" wd-rs-68460c2ba6365 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb-fix \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title box-title-style-default wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Talk_to_a_Small_Business_CPA_About_Your_Situation\"><\/span>Talk to a Small Business CPA About Your Situation<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Please use the form below to tell us a little about yourself, and what you have going on with your small business or 1099 contractor gig. <strong>WCG CPAs &amp; Advisors<\/strong> are small business CPAs, tax professionals and consultants, and we look forward to talking to you!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner el_id=\"consultation-inner\" woodmart_css_id=\"66fd6caf92fc0\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NmZkNmNhZjkyZmMwIiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner][vc_raw_js el_class=\"defaultBot\"]JTNDc2NyaXB0JTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3Y2dpbmMuam90Zm9ybS5jb20lMkZqc2Zvcm0lMkYyNTE2NjQ4Nzk0MTQ5NzMlMjIlM0UlM0MlMkZzY3JpcHQlM0U=[\/vc_raw_js][\/vc_column_inner][\/vc_row_inner]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c16bff16\" class=\" wd-rs-68460c16bff16 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title defaultBot \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>The tax advisors, business consultants and rental property experts at <strong>WCG CPAs &amp; Advisors<\/strong> are not salespeople; we are not putting lipstick on a pig expecting you to love it. Our job remains being professionally detached, giving you information and letting you decide within our ethical guidelines and your risk profiles.<\/p>\n<p>We see far too many crazy schemes and half-baked ideas from attorneys and wealth managers. In some cases, they are good ideas. In most cases, all the entities, layering and mixed ownership is only the illusion of precision. As Chris Rock says, just because you can drive your car with your feet doesn\u2019t make it a good idea. In other words, let\u2019s not automatically convert \u201cyou can\u201d into \u201cyou must.\u201d<\/p>\n<p><strong>Let\u2019s chat so you can be smart about it.<\/strong><\/p>\n<p>We typically schedule a 20-minute complimentary quick chat with one of our Partners or our amazing Senior Tax Professionals to determine if we are a good fit for each other, and how an engagement with our team looks. Tax returns only? Business advisory? Tax strategy and planning? Rental property support?<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner equal_height=\"yes\" el_class=\"boxes--pack\" woodmart_css_id=\"673b5f334f247\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzNiNWYzMzRmMjQ3Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-687b937e0887f\" class=\" wd-rs-687b937e0887f wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Text-WCG-Offices-1.jpg\" class=\"attachment-full size-full\" alt=\"Text WCG Offices\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Text WCG Offices<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Need to get in touch through a quick text?\u00a0 We\u2019ll respond back within a day and get going!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"sms:+17193452100?&amp;body=Hey%20WCG!%20Please%20call%20me%20to%20discuss%20your%20CPA%20services\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-687b9384e0d51\" class=\" wd-rs-687b9384e0d51 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-Our-Amazing-Team-1.jpg\" class=\"attachment-full size-full\" alt=\"Chat our amazing team\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Call Our Amazing Team<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p class=\" \">If you need to speak to a tax professional now, give us a call and we'll get you connected.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"tel:719-387-9800\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-687b938a8f4b3\" class=\" wd-rs-687b938a8f4b3 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes nav-button-chat \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-With-a-Tax-Pro-2.jpg\" class=\"attachment-full size-full\" alt=\"Chat with a tax pro\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Chat With a Tax Pro<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Taxes can be tricky. Chat with a WCG human now and get questions answered.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" woodmart_css_id=\"684abef7ecaa9\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2ODRhYmVmN2VjYWE5Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcf7fc8516a\" class=\" wd-rs-68bcf7fc8516a wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Schedule_Discovery_Meeting_Now\"><\/span>Schedule Discovery Meeting Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner content_placement=\"middle\" el_class=\"client-review-secs box--card\" woodmart_css_id=\"672e712482714\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzJlNzEyNDgyNzE0Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\" woodmart_css_id=\"671780b35b49a\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBiMzViNDlhIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t<div id=\"wd-68874e76cd7bc\" class=\"wd-image wd-wpb wd-rs-68874e76cd7bc text-left \">\n\t\t\t\n\t\t\t<img decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/265518_2057667071_tax_consultation_300-1.webp\" class=\"attachment-full size-full\" alt=\"Request a Meeting with WCG Inc\" \/>\n\t\t\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"2\/3\" woodmart_css_id=\"671780c0415fb\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBjMDQxNWZiIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcfccd83cf7\" class=\" wd-rs-68bcfccd83cf7 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none with-btn box-btn-static \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Ready to schedule now and talk about S Corp and reasonable salary and all that gibberish? Let's do it! Here is a link to a Discovery Meeting with one of our Partners or Senior Tax Professionals to understand your tax footprint and objectives, and how <strong>WCG CPAs &amp; Advisors<\/strong> might help.<\/p>\n<\/div>\n\n\t\t\t\t\t\t<div class=\"info-btn-wrapper\"><div id=\"wd-6a31ba5e2cd66\" class=\"  wd-button-wrapper text-left\"><a href=\"https:\/\/calendly.com\/wcg-cpas-advisors\/discovery-meeting-instant\" title=\"\" target=\"_blank\" class=\"btn btn-style-default btn-shape-rectangle btn-size-default\">Schedule Meeting<\/a><\/div><\/div>\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/div>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>When your S corporation pays for your self-employed health insurance (SEHI), including coverage for your family, that amount is added to Box 1 Wages on your W-2. So, your income is artificially increased by the annual amount of premiums. However, [&#8230;]<\/p>\n","protected":false},"author":6,"featured_media":31381,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"epkb_post_type_1_category":[117],"epkb_post_type_1_tag":[],"class_list":["post-14031","epkb_post_type_1","type-epkb_post_type_1","status-publish","has-post-thumbnail","hentry","epkb_post_type_1_category-chap-3-s-corporation-benefits"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>S Corp Health Insurance - Tax Savings with Health Insurance - WCG CPAs &amp; Advisors<\/title>\n<meta name=\"description\" content=\"S Corp health insurance lowers the amount reasonable shareholder salary which reduces Social Security and Medicare taxes. Ask us how!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wcginc.com\/kb\/tax-savings-with-health-insurance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax Savings with Health Insurance\" \/>\n<meta property=\"og:description\" content=\"S Corp health insurance lowers the amount reasonable shareholder salary which reduces Social Security and Medicare taxes. 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