Deducting Life Insurance Premiums on Schedule C
As a self-employed individual, you may be able to deduct your life insurance premiums on Schedule C under certain circumstances. The deduction for life insurance premiums on Schedule C is generally allowed if the insurance is considered a business expense and is directly related to your self-employment activities. However, there are specific criteria that must be met in order to qualify for this deduction.
According to the IRS, you can generally deduct the cost of life insurance as a business expense if it is a requirement for your business, such as if it is necessary to secure a business loan or if it is a key person insurance policy. Additionally, if you are a sole proprietor, partner, or LLC member, you may be able to deduct the cost of life insurance as a business expense if it is used to secure a business loan or to provide a source of income for your family in the event of your death.
It's important to note that personal life insurance premiums, such as those for individual or family coverage, are generally not deductible on Schedule C. The IRS considers personal life insurance premiums to be a personal expense and therefore not eligible for deduction as a business expense.
Before claiming a deduction for life insurance premiums on Schedule C, it's advisable to consult with a tax professional or refer to IRS Publication 535, Business Expenses, for detailed guidance on the deductibility of life insurance premiums for self-employed individuals.