Do you know about Johnson case? Insurance (Part 10)

Presented by Paystrubmakr.com      By John Wolf and Tom Cullen CPA

PAYSTUBSMAKR.COM   bringing you more about Insurance, Payroll, and Taxation.

Johnson Case

In the Howard Johnson, 74 T.C. No. 96 (1980), a split-dollar plan that insured the life of a shareholder-employee, resulted in the taxable term cost charges being taxed to the shareholder as a dividend. The proceeds of the split-dollar policy were payable to an irrevocable trust to benefit the insured wife and other family members. The court held that since the corporation’s records did not indicate that additional compensation was intended, a taxable dividend resulted.

Dollars

                 

Understanding the Small Business Health Care Tax Credit

Business Travel Accident Insurance

This kind of policy provides life insurance if the executive is dismembered or killed accidentally while traveling on company business. Premiums paid by the employer for such coverage are deductible if the amounts paid to qualify as ordinary and necessary expenses of the employer’s trade or business under §162. Regulation §1.162-10(a) provided that an employer may deduct amounts paid or accrued during the taxable year for sickness, hospitalization, surgical, medical, or accident benefits plan covering its employees, and it appears to be sufficiently broad to cover travel accident insurance.

What Does Business Travel Accident Insurance Cover?

Health insurance covers dental care

ACA and Employers – Know if Coverage You Offer Meets Requirements

Medical & Dental Insurance

Employer-paid health or medical insurance plans are so commonplace for all employees, including the highly compensated, that little thought is given to their tax implications. Such plans provide a substantial economic and tax benefit to the employee and must not be overlooked when developing a fringe benefit package for the highly compensated.  Best Dental Insurance Companies

                                     

Health first!

Employer Health Care Arrangements

Premiums

The employer deductibles the premiums and are excluded from the employee’s income (§106 and Reg. §1.106-1). This is an exception to the general rule of taxation contained in §105(a). The exclusion under §106 for health insurance premium payments has been, unlike many other exclusionary provisions of the Code, rather generously interpreted by the IRS.

Weel chair

     

Are Your Social Security Benefits Taxable?

Disability Income Insurance

Many employers offer disability income plans to their employees that, in effect, provide income protection if the employee’s physical condition makes it impossible to work. An employee excludes from gross income employer-provided coverage under an accident or health plan. The exclusion extends to coverage of personal injuries and sickness of the employee, his spouse, or his dependents (§106) However, the exclusion for employer-provided medical expense reimbursements does not apply to the amount which the taxpayer would be entitled to receive irrespective of whether he incurs expenses for medical care. If under a wage continuation plan, an employee is entitled to wages during an absence from work due to sickness or injury, the wages are not excludable from income even though the employee may have incurred medical expenses during the period of illness (Reg. §1.105-2).

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Disclaimer: John Wolf and paystubmakr.com are making a total effort to offer accurate, competent, ethical HR management, employer, and workplace advice.  We do not use the words of an attorney, and the content on the site is not given as legal advice. The website has readers from all US states, which all have different laws on these topics. The reader should look for legal advice before taking any action.  The information presented on this website is offered as a general guide only.