Insurance premiums for an S-corp shareholder are deductible to the business (employee benefits OR insurance expense) and should be added to the W-2 as compensation. The compensation is subject to income tax, but not SS/Medi tax or FUTA. QB has a payroll deduction category for this. Then the employee deducts as self-employed health insurance on the 1040.
Medical expenses beyond the premiums are personal expenses and are not deductible as business expenses, and should be considered distributions.
Mark Wagner, CPA
