Video: S Corporation Fringe Benefits

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of fringe benefits within S-corporations. He kicks things off by defining what constitutes a fringe benefit and then delves into their deductibility and treatment, particularly honing in on the implications for shareholders with different levels of ownership. With clear examples, Nick navigates through the tax effects on those owning more or less than 2% of an S-corporation, discussing how benefits like health insurance, life insurance, and retirement plan contributions are handled for each group. He further illustrates these points by working through practical scenarios involving multiple shareholders with varying stakes, ensuring that the takeaway is not just theoretical but grounded in real-world application. By the end of this lesson, the nuances of S-corp fringe benefits, especially the crucial 2% ownership threshold and its tax consequences, are thoroughly elucidated.