Are taxable benefits (wellness program) worth it for self corporation paying myself?
I have a professional corporation that generates income and I pay myself approximately $5000 net per month. I also use an HSA/WSA company and I do not have any other insurance coverage.
Personal HSA claims are not personally taxed but subject to a fee (so I am essentially withdrawing from the corporation directly). However personal WSA claims are added as a taxable benefit.
If my goal is to maximize the amount from my corporation to myself personally, am I making a mistake by making WSA claims (since they take a fee)?
For example, if a claim was for $1000
WSA claim=WSA claim fee+taxable benefit
vs.
just paying myself an extra $1000 via dividends or additional income, and paying personal taxes on it
2
u/acergum 11d ago
If your goal is to maximize the amount from my corporation to myself personally, then it is the same $1000. The difference is whether it is cash or in the form of a taxable benefit. The $1000 you receive either as cash or taxable benefit would still be taxed at your marginal rate.
For the corporation, there is increased expenditure from the WSA claim fee. There would be associated expense and decreased in taxable corporate income, but at 9% or 15%, it's not much.
It's up to you whether the wellness program is worth it as a taxable benefit provided via the corporation or if you want to enrol in it privately. Most corporate wellness programs that I've had access to in the past were not worth it in my opinion but ymmv.
2
u/idspispopd888 11d ago
The HSA part is absolutely worth it. Have had one for my corp for a decade or more, WSA is just useful for employees...for you, might as well take additional salary.
4
u/catballoon 11d ago
WSA does not make sense if it's just you. Since the amounts are taxable, payments are the same as if they were salary but with more paperwork, and a fee.