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Health insurance reimbursement

Hope123Hope123 Member Posts: 8
A single member/owner LLC pays for cobra Health insurance from business account. One month, premium was accidentally paid from personal account. How do I reimburse the owner? Is it correct to make an electronic transfer from business account to personal account and categorize the transaction in Wave as an expense for health insurance? Thanks!!
in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @Hope123,
    You can either do what you have above or you can do a journal entry
    Debit Health Insurance and Credit either Shareholder Loan or Shareholder Distributions. Whichever you have. A note, the health insurance needs to be included in box 1 of the W-2. Check with your payroll provider as to how to get that done. That is because health insurance is not deductible by the S corp as insurance, rather it is deducted as compensation. On your personal return you will get a deduction for self employed insurance.

  • Hope123Hope123 Member Posts: 8
    Thank you so much! I appreciate the help. Happy holidays!
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