S Corporation Health Insurance
If you are a more than 2% shareholder of an S Corporation and the corporation provides a Health insurance policy for you or reimburses you for Health insurance you paid, you must do the following:
1. The amount of the health insurance must be added to your W-2 for the year. The amount added is not subject to any federal or state withholding. It is only subject to FICA, Medicare, and unemployment if the health insurance offered by the company is discriminatory. Call us if you have any questions.
2. THE ONLY WAY YOU CAN DEDUCT THE INSURANCE ON YOUR PERSONAL RETURN IS IF THE PREMIUMS ARE:
a. Paid by the company directly to the insurance company
b. Reimbursed in the calendar year to the shareholder. The company should keep a copy of the bill from the insurance company for their records.
c. Included in the shareholder's W-2 form
Penalty Notices
If you receive a penalty notice from either the IRS or NYS, please let us know by faxing a copy of it to our office BEFORE you take any action on it. Some clients have paid the amount due on the notice only to find out later after we have reviewed it that they did not owe the money. There may also be a presumption depending on the type of notice, that you were liable for the interest and penalty if you paid it. This may make it more difficult to get out of future penalties, since they look at your history to determine whether or not to waive penalties.
QuickBooks Hints
The following should be set in QuickBooks to avoid headaches:
Click on the Edit pull-down menu, then click Preferences. At the top of each window is a My Preferences tab and a Company Preferences tab. On the left is a scrollable list of the types of preferences you can set. You should review all the preferences under both tabs for all types of preferences that apply. The following preferences should be carefully reviewed:
Checking: Here you can set default bank accounts (if you have more than one), set the default date to print on checks, and warn of duplicate check numbers.
Desktop: You can view open windows different ways and decide whether you will use navigator or not.
General: Set whether the enter key moves between fields or accepts the whole page, turn on warning messages (recommended), whether to recall the last transaction for that name, and set the default date for transactions (today or the last date used in the software).
Reminders: Make sure to set these - they are very useful especially if you set it to show on startup.
Reports/Graphs: Set to refresh automatically and put a checkmark in the box to display modify report. This allows you to change report settings before QuickBooks tries to create the report based upon default settings (i.e. the date range can be changed before the report is generated)
Tax:1099 setup - This needs to be setup so that your software will help you generate 1099's at year end.
QuickBooks - Upgrade to 2008?
If you have version 2004 or older, you should consider upgrading since the company will no longer support these older versions. We don't feel you need to upgrade every year, but should consider it every 2-3 years. Buy it through our website and get a 15-20% discount.
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Windows Tips
1. If you are walking away from your computer and you want to lock it (requiring a password to get back in) press and hold the windows key (between the Ctrl and Alt keys) and type the letter "L". This will take the computer back to the sign in screen but will leave all your programs open.
2. To close multiple Windows applications at once instead of one at a time: Hold down the Ctrl key and click the programs you want to close in the task bar (the very bottom of the screen). Then while the cursor is on any of the programs you selected in the taskbar, RIGHT click your mouse and click on "Close Group"
