Fringe Benefits - By Type of Business Entity

This post will discuss the availability of fringe benefits by the type of business, such as sole proprietorships, partnerships, C corporations, S corporations, and LLC's.

Sole Proprietorship

• Health Insurance Plan
• Medical Expense Reimbursement Plan
• Dependent Care Assistance Reimbursement Plan
• Retirement Plan
• Employment of Child If Under Age 18
• Reimburse the Spouse for Auto Expenses
• Travel Expense of Spouse

In the case of a married sole proprietor, especially one with children, these benefits can be substantial, with only a nominal amount of additional effort required.

Taxation of Fringe Benefits

C Corporation

• Health and Accident Insurance Plans
• Adoption Assistance
• Athletic Facilities
• De Minimis Benefits
• Dependent Care Assistance
• Educational Assistance
• Employee Discounts
• Employee Stock Options
• Employer-Provided Cell Phones
• Group Term Life Insurance
• Health Savings Accounts
• Meals
• Moving Expense Reimbursements
• Transportation (Commuting) Benefits

Employer's Guide to Fringe Benefits

Partnerships and S-Corporations

Fringe benefits are not generally tax free for partners, and for 2% or greater S-corporation shareholders.

LLC Entities

If an owner of an LLC employs the spouse, such as is done by a sole proprietorship, then the entity can utilize the tax deductible benefits for Medical Insurance Plan, Medical Expense Reimbursement Plans, and a Dependent Care Assistance Expense Reimbursement Plan.

Post Updated May 2, 2015