CCPA: End of Year Fringe Benefits Reminder for S-Corp Owners
As we wrap up the year, we wanted to give you a quick reminder about some important reporting tasks for S Corporation owner fringe benefits. These need to be properly included on your W-2s to keep everything IRS-compliant and avoid any unnecessary headaches.
Key Fringe Benefits to Keep in Mind:
Personal Use of Company-Leased Vehicles: If you’ve used a company-leased vehicle for personal reasons, that usage has to be reported as taxable income on your W-2. We’ll need to track and document the value of that personal use. (Click to read more here.)
S Corporation Owner Health Insurance: If the company paid health insurance premiums for you as an S Corp shareholder (owning more than 2%), those amounts need to be included on your W-2 (don’t worry, it’s not subject to taxes, this is just where it gets reported).
Action Items:
Check Your Records: Make sure you’ve got accurate info on any personal use of company-leased vehicles. The IRS requires you to maintain a contemporaneous log of vehicle usage - personal and business - throughout the year. This is a good time of year to review and ensure you have a complete log available: you should expect that we’ll have to ask you for business vs personal mileage totals for the year as part of your tax preparation process.
Health Insurance Details: Make sure you have copies of all of your company health insurance bills for the year, and calculate the total premiums the company paid for your health insurance.
Submit These Inclusions to Your Payroll Company On Time: Most payroll companies are approaching their year end deadlines for submission of fringe benefit inclusions to payroll. We suggest making this a priority next week (and calendarizing for 12/1 of each year moving forward!) if you haven’t already done so.
If you have questions or need help, please reach out to your Harmony tax team member for any support you need.
Regards,
Matt Hetrick, CPA
Harmony Group