Where do I enter life insurance premiums for officers?
Officer life insurance premiums are handled in one of two ways for an 1120S.
- If the corporation is not the owner of the policy nor a beneficiary, then the premiums paid are included in other deductions for line 19. Amounts for other deductions are entered on the DED screen in the software. The amount of insurance is then automatically included in the Schedule M2 Line 2 for Column A (AAA) as ordinary income (or on line 4 if the corporation has a loss for the year). No adjustment is necessary on the M2 for other reductions, and the Wks M2 is in balance.
- If the corporation is the owner of the policy and a beneficiary, the amount is entered on the bottom of screen K, AMT and Basis tab. Entries here carry to Schedule K Line 16C, Schedule M1 Line 3B, and Schedule M2 Line 5 Column D (Column B in Drake17 and prior), other adjustments account (OAA). No other entries or adjustments are necessary, and the Wks M2 is in balance.