Discussion:Health Insurance as guaranteed payment

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Discussion Forum Index --> Tax Questions --> Health Insurance as guaranteed payment

Shaunna (talk|edits) said:

8 January 2007
LLC Partnership did not have an agreement when they started business. three partners.

Part 1) Their previous tax accountant has classified their individual health insurance as guaranteed payments. The health insurance was not owned or paid by the partnership, rather they were reimbursing the partners the amounts they paid. Is this going to hold up?

Part 2) One of the partners was removed from partnership status but the agreement with the partner is that they would continue to have their health insurance paid. Would this still be considered a guaranteed payment?

Www.cpa1.biz (talk|edits) said:

8 January 2007
1) If it is a guaranteed payment, then it should be okay. The amounts will go into the K-1 where it will eventually be deducted as self-employed health insurance on each individual's 1040.

The expense account can either show health insurance-owners or be guaranteed salary to the company.

2) As of the partner being removed from the partnership status, then it should hold up until that partner left. If he remained as an employee, it would be considered taxable income to him and he would have to deduct it as an imemized deduction (Schedule A).

I am pretty sure what I am saying is correct but another person may have a better response.


Shaunna (talk|edits) said:

8 January 2007
Great! This confirms my original thought.

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