I have a single member LLC and pay medical, dental, vision, life, disability and legal malpractice insurance out of my business operating account. Having legal malpractice insurance is required to run my business. So, is it a personal expense paid for through a Member Draw or a business expense paid for through a different type of account?
I record insurance payments in my operating account and assign them to my Member Draw equity account. Do I need to record the transaction anywhere else for my balance sheet to be accurate?
"premium payments for personal insurance are deducted on schedule A of the 1040 as well as medications, etc, see the instructions for schedule A"
Health Insurance Premiums (medical, vision, dental) fall into a different category than Life and are not Sched A if you fall under the Self-Employed rules as "earned income". Disability, we don't have enough info. Malpractice is "ordinary and necessary for business."
" Deduction for self employed isn’t new
If you buy your own health insurance, you should definitely know about the long-standing health insurance premium deduction for the self-employed.
Congress implemented a 25 percent deduction on self-employed health insurance premiums in 1987 and made it permanent in 1994. The self-employed received even better news in 2003 when premiums became 100 percent deductible.
The deduction – which you’ll find on Form 1040, Line 29 – allows self-employed people to reduce their adjusted gross income by the amount they pay in health insurance premiums during a given year. You’ll find the deduction on your personal income tax form, and you can file for it if you were self-employed and showed a profit for the year."