With tax preparation season in full swing, many of the individuals who have formed LLCs are wondering about tax deductions and write offs for their business. As their legal counsel or financial advisor, it is often up to you to guide them down this path.

Here are a few of the tax ‘benefits’ that come with forming a business as an LLC.

Health Insurance

Healthcare is a big issue these days, for employers and employees. As an LLC, the business owner will be able to deduct the cost of obtaining group hospitalization and medical insurance for all employees who are not members of the LLC. Caveat: this may or may not be affected by the implementation of Obamacare.

Currently, LLCs are eligible for the deduction regardless of the type of entity tax rules it is subject to. The deductible amount also includes the portion the LLC pays to provide employees with long-term care coverage.

Additionally, if the LLC is classified as a partnership, its members are considered to be self-employed. All self-employed taxpayers are eligible to deduct the cost of acquiring medical, dental and long-term care insurance for themselves, a spouse and all dependents.

Other Business Expenses

Smartphones are a must for every business owner and fortunately, a business cell phone plan might be deductible. Of course, it needs to be completely separate from a personal phone. Further, as an LLC, the business owner will be able to deduct up to 50% of the cost of meals relating to business entertainment or business development and the cost of meals with employees is 100% deductible.

This is not an exhaustive list of tax-deductible LLC expenses and the LLC may or may not be the ideal option for your client. But whether you choose to incorporate, file as a DBA, or form an LLC, Attorneys Corporation Service, Inc. can assist you from start to finish. From running a business name availability check to drafting and filing your client’s article and creating a customized corporate or LLC kit, look no further than Attorneys Corporation Service, Inc. for your business formation needs.

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