An ugly rule applies to how S corporation owners deduct the cost of health insurance that a corporation puts on its W-2s.

The words that make this an ugly rule are “earned income,” and this is unusual because you generally think of earned income as a good thing.

But for the S corporation owner who hopes to deduct his or her health insurance as a self-employed health insurance deduction on Schedule 1 of the owner’s personal Form 1040, the term “earned income” can create ugly results ... Log in to view full article.