Knowledge Base
Print

Tracking Fringe Benefits

fringe benefitsBy Jason Watson, CPA

Before we go too far down the road, your business needs to track the amounts paid for fringe benefits so they may be included as Officer Compensation on Line 7 of your S Corp tax return and Box 1 of your W-2. Specifically-

  • Self-employed health insurance premiums,
  • Health Savings Account (HSA) contributions made by the business
  • Personal use of business assets such as automobiles and airplanes.

There are others, but these are the biggies. If you are using accounting software or even Excel, each of these should be a separate category. If you wanted to get fancy, you could have an account labeled “Officer Compensation” with sub-accounts being Wages, health insurance, HSA, HRA and Other.

In QuickBooks-ese, it would look like this-

Officer Compensation : Wages
Officer Compensation : Health Insurance
Officer Compensation : HSA
Officer Compensation : HRA
Officer Compensation : Other

At tax time, your profit and loss statement would then be framed and hung on our smart client wall. Yes, we have a not-so-smart client wall too which is thankfully much smaller since it is temporary until we give you the “see… how it works is…” tutoring during a Periodic Business Review.

Jason Watson, CPA, is a Partner and the CEO of WCG CPAs & Advisors, a boutique yet progressive tax, accounting and
business consultation firm located in Colorado serving small business owners and taxpayers worldwide.

Jason Watson CPA LinkedIn     Jason Watson CPA Email

Taxpayer’s Comprehensive Guide to LLCs and S Corps 2025 Edition

LLC's and S Corps bookThis KB article is an excerpt from our 420+ page book (some picture pages, but no scatch and sniff) which is available in paperback from Amazon, as an eBook for Kindle and as a PDF from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or visit our webpage which provides more information.

$49.95 $39.95 $29.95

Wanna Talk About Your Small Business?

Please use the form below to tell us a little about yourself, and what you have going on with your small business or 1099 contractor gig. WCG CPAs & Advisors are small business CPAs, tax professionals and consultants, and we look forward to talking to you!

The tax advisors and business consultants at WCG are not salespeople; we are not putting lipstick on a pig expecting you to love it. Our job remains being professionally detached, giving you information and letting you decide within our ethical guidelines and your risk profiles.

We see far too many crazy schemes and half-baked ideas from attorneys and wealth managers. In some cases, they are good ideas. In most cases, all the entities, layering and mixed ownership is only the illusion of precision. As Chris Rock says, just because you can drive your car with your feet doesn’t make it a good idea. In other words, let’s not automatically convert “you can” into “you must.” Yes, it is fun to brag about how complicated your world is at cocktail parties, but let’s not unnecessarily complicate it for the bragging rights.

Let’s chat so you can be smart about it.

We typically schedule a 20-minute complimentary quick chat with one of our Partners or Senior Tax Professionals to determine if we are a good fit for each other, and how an engagement with our team looks. Tax returns only? Business advisory? Tax prep, and more importantly tax strategy and planning?

Should we need to schedule an additional consultation, our fee is $250 for 40 minutes. Fun! If we decide to press forward with a Business Advisory or Tax Patrol Services engagement, we will credit the consultation fee towards those services.

accounting services for small business

Text WCG
Offices

Need to get in touch through a quick text?  We’ll respond back as soon as we can.

accounting services for small business

Call Our
Amazing Team

If you need to speak to someone, we’re good listeners!  Give us a call and we’ll help you out!

Previous Taking Shareholder Distributions
Next 185 Business Deductions You Cannot Take

Table of Contents