Is there anyway I can write off my life insurance payment on my taxes?
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3 Responses
1.31.2010
Not for a sole proprietorship, which apparently you are. It's true that proceeds of life insurance usually are not subject to income tax, there are situations in which the proceeds would be. It's called the "transfer for value" rule and provides that if the policy has become a capital asset by someone purchasing the policy from another, then the proceeds are subject to income tax to the extent the proceeds exceed the premiums paid.
1.31.2010
You'll probably need someone with more tax knowledge than you will find here, but I can offer a little bit of help. Life insurance premiums are not tax deductible for personal life insurance. I believe that if you can show it as a legitimate business expense you may be able to deduct the premiums as a business expense. Many companies buy what they refer to as keyman insurance which reimburses the company if an executive dies. If you just buy life insurance with the company checkbook and leave your spouse and kids as the beneficiary I don't think it would be tax deductible. Source(s): Recent article on my blog on the subject of life insurance taxation: http://gardenstatelifeinsurance.blogspot…
1.31.2010
No, life insurance premiums aren't deductible. But life insurance proceeds aren't taxable either.