How do health insurance tax deductions work for a member managed LLC?
mona asked:
I own a business (LLC) with two other people. It is only us three; we do not have any additional employees. We pay for our health insurance through our business. Based on these facts, I was wondering how much I stand to save on my personal taxes. Is this a standard write off like any other business expense or does the IRS treat health insurance differently?
I own a business (LLC) with two other people. It is only us three; we do not have any additional employees. We pay for our health insurance through our business. Based on these facts, I was wondering how much I stand to save on my personal taxes. Is this a standard write off like any other business expense or does the IRS treat health insurance differently?
April 22nd, 2010 at 7:26 am
Multiple member LLC’s can be taxed 3 different ways:
1. As a partnership
2. As a C corporation
3. As an S Corporation
The deductability of health insurance premiums for your LLC will depend on which of the 3 types of entities your LLC elected to be taxed at (the default is the partnership form of taxation).
Typically, you will be able to deduct 100% of your health insurance premiums although there are some specials considerations for owner/officers of S Corporations who own more than 2% of the company.
If you speak with a CPA or qualified tax advisor they should be able to give you plenty of good tips. One thing that you may want to mention is a medical reimbursement plan. Here is some more detail on medical reimbursement plans. Check out this site to find the best health insurance just in one minute,
Here you can get free quotes from different health insurance companies in your area, its the best way to find an afforable health insurance with a reliable company.
Best Wishes,
April 23rd, 2010 at 7:49 am
I have a business too but with employees. I’m licking my chops at the prospect that I’ll never have to provide employee health and Workman’s compensation ever again. What a savings!
Sabra, great info.
April 23rd, 2010 at 8:59 am
Currently you can take a deduction as a business expense. B-Ho wants that changed because he wants a single payer system…government run. Look for changes in the deduction and phasing out private insurance if the socialist pass the bill.