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How should I pay health insurance? From a personal account or Business? Single member LLC

Kennewick, WA |

How should I pay health insurance? From a personal account or Business? Single member LLC. Looking for maximum tax dedections!

Attorney Answers 3


  1. I believe this is a question better posed to your accountant. I'm not sure that I get any tax benefit paying my health insurance out of my business since it turns up as income on my personal return. (professional services corp.)


  2. This is a question for your accountant, but my advice is to pay it out of your business entity. There is an option for LLC members to be taxed by the federal government as an "S-Corp" (flow through corporate taxation). This is a complicated election that I only recommend in specific instances (ask your accountant if this would provide a savings in your particular case), but the election could move the cost to a business expense separate from personal income and before income tax.

    Let me put it this way, as a personal expense there is no possibility for tax savings. As a business expense there may be tax savings, so go with that initially to provide the possibility of savings.

    Legal disclaimer: The answer provided above is for general information purposes only and should not be relied on. This answer does not form an attorney-client relationship. You should consult with an attorney of your choice to fully advise you about your legal rights and obligations


  3. Another issue to consider is whether you have (or expect to have) employees. The law limits your ability to provide benefits for yourself out of your company that you do not also provide for employees. Whether you want to do that may be determined by the size of your company, the competitive situation and the type of employees, among other things. You need to talk with both an accountant and a business attorney.

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