Are Medical and Long Term Care Insurance Deductable for my Rental Property LLC?

Forum|Forum|3 years ago
January 29, 2023
1 reply
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I have an LLC with a Single home as rental property. It is a two member LLC with my wife. We both pay Medicare Supplemental insurance premiums and Long Term Care Premiums. Are any of these deductible expenses under our LLC? IF deductible, where do I report these expenses on our Turbotax Business, Form 1065 and if reported will I need to pay self employment tax? Are there any limits to the insurance premiums that can be claimed?

TurboTax Business Windows

RobertB4444

The only way that your LTC and medicare payments are deductible is to show a legitimate business purpose for them (there isn't one, sorry) or if you and your wife are both employees of that LLC and the insurance payments are done as part of an employee benefits program which is available to all employees.

This entails issuing a W2 to both you and your wife as well as issuing paychecks from the LLC to both of you. You will also need to file quarterly payroll tax returns.

The good news is that if you are willing to jump through all those hoops then the only limit to the amount of medicare payments and LTC insurance that the LLC can deduct is your imagination. And the amount on the receipts.

You will need to be careful that your new salary does not decrease your social security payments. Keep an eye on the income limitations.

@rjmlam

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