Tax Facts

8774 / Can a sole proprietor deduct life insurance premiums paid for insurance on the sole proprietor’s own life?

Updated: December 30, 2024 at 07:44 AM
No. This is true regardless of who is beneficiary under the policy. In the case of a sole proprietorship, premium payments are treated as nondeductible personal expenses because a sole proprietor and the business are considered one and the same for tax purposes.1


The general rules governing the deductibility of life insurance premiums (see Q 8765) apply in the case of insurance purchased by a sole proprietor on the life of an employee.





1.  IRC § 262(a); Treas. Reg. § 1.262-1(b)(1).


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