Form 7206

Forum|Forum|2 years ago
July 1, 2024
3 replies
15 views

Form 7206 self employed health insurance for a more than 2% shareholder of an S-Corp line 11 is being limited to only box 5 Medicare wages, which I believe is incorrect. A more than 2% shareholder health insurance premiums are only reported in box 1 and 16 not in box 5. Because my shareholders are scaling back their W-2s were not much this year and the Form 7206 is not allowing the full deduction for the SE health insurance. Two questions - how are others getting around this limitation? My taxpayers are allowed the full deduction. Reading the instructions my taxpayers are not required to file Form 7206, but I do not see how to not file this report in Lacerte. How can I report the full SE health insurance deduction and not include the Form 7206?

This topic has been closed for replies.

PhoebeRoberts

Intuit Community Champion

Box 5 wages is the amount properly treated as equivalent to SE income for >2% S-corp shareholders.

T

TaxGuyBill

Level 15

@Shicks wrote:

is being limited to only box 5 Medicare wages, which I believe is incorrect.\

My taxpayers are allowed the full deduction.

The program is correct and it sounds like your clients are not allowed the full deduction. See IRC §162(l)(2)(A).

https://www.law.cornell.edu/uscode/text/26/162#l

Accountant-Man

Level 13

A self-employed person is allowed to deduct SEHI "above-the-line" only to the extent of the self-employed earnings, .e., Sch C net income (less one-half of the SE tax).

To compare, an S corp shareholder has no SE income, so the equivalent is the EARNINGS from the S corp--meaning the wages.

The SEHI is included in Box 1 wages but NOT box 3 or 5(Medicare wages). If there are no wages other than SEHI, then the shareholder gets no deduction above-the-line.

You gotta have other wages in Box 5.

** I'm still a champion... of the world! Even without The Lounge.

kerry11

Level 4

Does Pro Series allow more than one 7206 and if so how can I add another 7206 for a different K1 S Corp?

sjrcpa

Level 15

@kerry11 Start a new topic for this question and select ProSeries.

EDIT: I see you did.

The more I know the more I don’t know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded