Affordable Life USA helps many small business owners secure great rates on life insurance. A frequent question many business owners often ask, is life insurance tax deductible for small business owners?
Most business owners realize that the expenses you pay to operate your business are tax-deductible.
But, is life insurance tax deductible?
We will clarify when life insurance premiums are tax deductible for coverage on the life of the business owner and for the company’s employees.
Dig right into our helpful reference guide on the tax implications of life insurance.
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, and you may be able to deduct your 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? Yes, you can usually deduct the life insurance premiums you pay as business expenses. Examples of such policies for employees include both Buy-sell life insurance and Key Person life insurance.
Life insurance premium tax deductible 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.
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 for Group Life Insurance?
Employers who provide group term life insurance to workers may deduct premiums paid for that coverage if the small business is not the beneficiary.
The life insurance premium tax deductible expense of group term life insurance premiums is limited to the cost for $50,000 of coverage.
Businesses 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 Life Insurance Tax Deductible for premium paid on Key Man Life Insurance?
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.
Are life insurance premiums tax deductible for a key man life insurance?
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 Life Insurance for your Business?
Hopefully, you have learned which situations cause life insurance premiums to be tax deductible.
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
- Mortgage Protection
- Key person insurance
- Buy-sell life insurance
- Business Loan Protection
- Survivorship life insurance
We have developed a disciplined process to assist successful companies with their personal and business life insurance needs.
Many small business owners need life insurance coverage to protect their income, cover a large loan, or to cover key employees.
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 life insurance.
Their are a two popular types of life insurance for business owners.
Term life which 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 is a form of permanent life insurance, which has a cash accumulation component along with lifetime coverage.
Our goal is to find the best life insurance policy for your company’s life insurance needs. “Instant Life Insurance Quotes” is easy method to compare affordable term and permanent life insurance quotes in minutes.
If you need help determining the best option for your business, please do not hesitate to call us at 1-877-249-1358.