Affordable Life USA helps many small business owners secure great rates on life insurance. A frequent question many business owners often ask, can I deduct life insurance premiums as a business expense?
Most business owners realize that most of the expenses you pay to operate your business are tax-deductible.
But, are life insurance premiums tax deductible for a business?
We will now discuss the deductibility of life insurance premiums for business owner and for the company's employees.
Dig right into our helpful reference guide on the tax implications of life insurance for business.
Are Life Insurance Premiums Tax Deductible?
Is Life Insurance Tax Deductible for Business Owners?
The premiums you pay for life insurance policies intended to provide for your family in the event of your death are not tax-deductible, even if you pay the premiums from your business checking account.
However, if you have a life insurance policy for protecting your business assets, life insurance premiums are tax deductible. So, you should be able to deduct life insurance premiums on Schedule C of your 1040.
Is Life Insurance Tax Deductible for premiums paid on Employees?
Is life insurance tax deductible, if you purchase life insurance policies for your employees? Examples of such policies for employees include both buy-sell life insurance and key person life insurance.
Yes, you can usually take life insurance deduction for the premiums you pay on employees as business expense.
Tax deductible life insurance premium expenses should be claimed as a business expense and also listed on your Schedule C.
Though you can usually deduct the cost of premiums you pay for employee life insurance, you cannot deduct these premiums if you (the business owner) benefit from the policy.
So,if you are the beneficiary of a policy owned by the employee, the premiums you pay are not deductible as a business expense.
Is Life Insurance Tax Deductible for premiums paid on Group Life?
Employers who provide group term life insurance to workers may deduct life insurance premiums paid for coverage if the small business is not the beneficiary.
The portion of premium which is a tax deductible expense with group term life insurance premiums is limited to the cost for $50,000 of coverage.
So, small companies may take a tax deduction for those premiums, but not for any money paid to provide coverage in excess of a $50,000 death benefit.
Is key man life insurance deductible?
Some small business owners elect to purchase life insurance coverage on key employees. In the event of the employee's death, the business receives the life insurance policy proceeds.
Business owners usually want to know, what are the key man life insurance tax implications "or" is key person life insurance tax deductible?
Yes, business owners can take a tax deduction, but only if those premiums are charged to the insured employee as taxable income.
Do you Need Business Life Insurance?
Hopefully, you have learned more about the deductibility of life insurance premiums in relation to your business.
Affordable Life USA helps successful small business owners find affordable life insurance rates. We can assist business owners with ideas and prices for the following:
- Personal Life Insurance
- Key Person Life Insurance (Key Man Life)
- Buy-sell Life Insurance
- Business Loan Protection
We have developed a disciplined process to assist successful companies with their personal and business life insurance needs.
Many key employees need business life insurance coverage to protect their income, cover a large loan, or to cover key managers.
Many business owners depend on the recommendation of their key advisers. We work in coordinated effort with these advisors to find the best value available on business life insurance.
Types of Business Life Insurance
Their are a two popular types of life insurance for business owners.
Term life for Business Owners Term life offers guaranteed death benefits and level premiums for an initial period of 10, 20, or even 30 years. Term life insurance is an excellent choice for business owners looking to obtain the largest amount of insurance at the lowest cost.
Universal life insurance for Business Owners Universal life is a form of permanent life insurance, which has a cash accumulation component along with lifetime coverage. Universal life offers business owners the opportunity to maintain coverage for their entire lifetime.
Do you Need Life Insurance quotes for your Business?
Our goal is to find the best life insurance policy for your company’s life insurance needs.
If you need help determining the best option for your business, please do not hesitate to call us at 1-877-249-1358