Can I deduct my physician disability insurance premiums? Are my benefits taxable?

We are often asked if physician disability insurance premiums are tax deductible and whether any benefits received are taxable. The answers depend on your practice scenario:

1. If you are a non-owner employee or sole proprietor, then the premiums are not tax deductible. In the event of a disability, your disability benefit will not be taxable.
2. If you are the owner of a c-corporation, you can deduct the premiums paid for shareholder and non-shareholder employees. In the event of a disability, the benefits will be taxable.

Contact us or your tax advisor if your practice situation does not fit into one of the scenarios above.