Is a Life Insurance Premium a business expense?

[Rajesh Malhotra]

Tax Gurus,

I get paid on a 1099. Can I deduct my Life Insurance premiums
(whole life policy) as a business expense? If not, can it be deducted on
my personal taxes?

Any and all responses on this matter appreciated.

Thanx,

Raj.

[BrianFrmTx]

In article <37bsfs$6...@gauss.rutgers.edu>, manm...@gauss.rutgers.edu
(Rajesh Malhotra) writes:

Life insurance premiums are specifically designated as non-deductible
expenses in the Internal Revenue Code. If you have an unincorporated
business (which it appears you do since your income is reported on a
1099), then there is no deduction available.

It is possible in certain employer-employee arrangements to treat premiums
paid by an employer as compensation expense, and in those cases it may or
may not also be compensation income to the employee. You could possibly
take advantage of this by incorporating your business, but the coverage
that can be provided tax-free is generally limited to $50,000 face amount
of group term life.
Incorporating would also allow you to deduct medical insurance in full,
rather than the 25% deductibility unincorporated businesses have.

[Helen O'Planick]

-> Message-ID: <37bsfs$6...@gauss.rutgers.edu>
-> Newsgroups: misc.taxes
-> Organization: Rutgers University LCSR
->
-> Tax Gurus,
->
-> I get paid on a 1099. Can I deduct my Life Insurance premiums (whole
-> life policy) as a business expense? If not, can it be deducted on my
-> personal taxes?
No, life insurance is a personal expense.

Helen

[Dennis M. Maurer]

Helen O'Planick (helja...@bitbytes.clark.net) wrote:

(Rajesh Halhotra) writes:
: -> I get paid on a 1099. Can I deduct my Life Insurance premiums (whole

: -> life policy) as a business expense? If not, can it be deducted on my
: -> personal taxes?

(Helen) writes:

: No, life insurance is a personal expense.

Life insurance is not deductible on your federal income taxes, but it
has nothing to do with it being a "personal expense". There are many
personal expenses that ARE deductible. (Examples: personal property
taxes, state and local income taxes, real estate taxes. etc, etc)

Regards,
Dennis M. Maurer
--

[Paul Maffia]

dma...@netcom.com (Dennis M. Maurer) writes:
>: No, life insurance is a personal expense.

>Life insurance is not deductible on your federal income taxes, but it
>has nothing to do with it being a "personal expense". There are many
>personal expenses that ARE deductible. (Examples: personal property
>taxes, state and local income taxes, real estate taxes. etc, etc)

Sorry Dennis, by definition, the so called "personal expenses" you list
are not classified as personal expenses. They are classified as taxes
paid. And, generally speaking, direct taxes levied and collected from you
are deductible.

Paul M.

[Dennis M. Maurer]

Paul,
My comments will be inside the brackets [xxxx]

Paul Maffia (pau...@eskimo.com) wrote:

: dma...@netcom.com (Dennis M. Maurer) writes:
: >: No, life insurance is a personal expense.

[I did not write the above statement, if you check back I believe
you'll find Helen wrote that]

: >Life insurance is not deductible on your federal income taxes, but it

: >has nothing to do with it being a "personal expense". There are many
: >personal expenses that ARE deductible. (Examples: personal property
: >taxes, state and local income taxes, real estate taxes. etc, etc)

[I did write the above paragraph, but maybe not as clearly as I had wished]

: Sorry Dennis, by definition, the so called "personal expenses" you list

: are not classified as personal expenses. They are classified as taxes
: paid. And, generally speaking, direct taxes levied and collected from you
: are deductible.

[You (Paul) wrote the above]

[Many deductible expenses we pay, are known by more than one name, some
TAXES we are personally responsible for, are also known as "taxes paid".
We also have expenses that are called Medical and Dental expenses, and
Interest Paid, as well as others, all of which can be, and are, called
PERSONAL EXPENSES. These are the types of personal expenses I was trying
to describe - sorry if I confused anyone.]

[The point I wished to raise, was that a item was not "non-tax deductible"
simply because it was personal]

[Richard H. Ross]

manm...@gauss.rutgers.edu (Rajesh Malhotra) writes:

>Tax Gurus,

>Thanx,

>Raj.

Sorry Raj, life insurance premiums are considered non-deductible
personal expenses. The only way to deduct whole life premiums is to use
a split-dollar policy, but you have to operate as a corporation. This is
a very technical area of the law. You can deduct term premiums in a
corporation as long as you are an officer of the corp., you include the
premiums in your income and the company is not the beneficiary.

e-mail if you need further clairification.

--
Richard H. Ross, CPA, CFP
e-mail to: rr...@america.net