I'm familiar with the executive bonus plan you can implement with C-corporations where you're able to avoid being taxed at the company level and you can double bonus the employee in order to keep his income tax liability where it was prior to the bonus.
I want to know if there's a way to make life insurance contributions pretax for the employer in an S-corporation.
I have a specific example. Say you're one of those guys who has an S-corp and has all his income go through the s corp, and they write every single expense in their life off through the s corp. There's still some money left in the end and they have to pay corporate k-1 taxes, but they don't actually w-2 any salary to themselves. If I understand correctly this is a violation because you're supposed to pay SS taxes on every single thing you buy for yourself even if you can justify it as a corporate expense (correct me if I'm wrong please). However, in spite of this being a violation there's a massive amount of people who still do it. Can a guy who has a company with this structure have his company buy a life insurance policy where he is the insured, and write off this policy's premiums as an expense?
Thanks!
I want to know if there's a way to make life insurance contributions pretax for the employer in an S-corporation.
I have a specific example. Say you're one of those guys who has an S-corp and has all his income go through the s corp, and they write every single expense in their life off through the s corp. There's still some money left in the end and they have to pay corporate k-1 taxes, but they don't actually w-2 any salary to themselves. If I understand correctly this is a violation because you're supposed to pay SS taxes on every single thing you buy for yourself even if you can justify it as a corporate expense (correct me if I'm wrong please). However, in spite of this being a violation there's a massive amount of people who still do it. Can a guy who has a company with this structure have his company buy a life insurance policy where he is the insured, and write off this policy's premiums as an expense?
Thanks!