- Ownership of the Policy: If the LLC is the policy owner, premiums paid are not considered a personal expense but a business expense.
- Taxable Death Benefit: The death benefit may be subject to taxes if the LLC pays the premiums, differing from individually-owned policies.
- Deductibility of Premiums: Premiums may not be deductible as a business expense, depending on the policy’s structure and purpose.
- LLC as Beneficiary: If the LLC is also the beneficiary, the death benefit is typically considered taxable income.
- Employee Benefit: Certain conditions must be met for tax efficiency if used as an employee benefit.
Consultation with Professionals
- Tax Advisor: Essential for understanding the specific tax implications for your situation.
- Insurance Specialist: Can provide insights on structuring the policy to align with your business needs.
While your LLC can pay for your life insurance, the arrangement can lead to taxable death benefits, unlike personal policies. It’s crucial to consult with a tax professional and an insurance specialist to navigate these complexities effectively. Contact us today for a free quote.
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