Today TaxMama hears from Magdalena in the TaxQuips Forum with a puzzler. “I would like to know if I can take the Health Savings Account Deduction on my 1040 if I’m a S-corp owner?”
Looking through all the information about HSAs, I don’t find any mention of S Corps. So, let’s see if we can think this through, logically, OK?
First, let’s look at what it takes to qualify for an HSA:
Qualifying for an HSA
To be an eligible individual and qualify for an HSA, you must meet the following requirements.
- You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
- You have no other health coverage except what is permitted under Other health coverage , later.
- You are not enrolled in Medicare.
- You cannot be claimed as a dependent on someone else’s 2010 tax return.
The very first provision talks about having coverage under a HDHP. It doesn’t say if the plan comes from your employer or on your own. So if you pay for your own health insurance, buy an HDHP – yes, you can qualify for an HSA – regardless of the nature of your business.
Naturally, if your S Corp pays for your health insurance, you know you need to add the premiums to your wages and the S corp must pay the premiums directly to the insurance company.
And remember, you can find answers to all kinds of questions about HSAs and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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