Gaap Income statement for single member LLC

Forum|Forum|4 years ago
May 10, 2022
7 replies
61 views

If I am preparing gaap income statements for a single member LLC (disregarded entity), do I deduct health insurance premiums on the books? I know that I do for income tax purposes, but I am trying to create gaap FS.

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Teri11_2

Level 2

Much depends on how LLC is filing taxes (to do GAAP FS correctly) since it is a disregarded entity. Filing as:

- Sole proprietor

- Partnership (na)

- S-Corporation

- C-Corporation

Rainflurry

Level 11

@raeray1st

GAAP-compliant income statements for a single-member LLC (sole proprietorship) is not really possible IMO. GAAP assumes that the owner's personal transactions are separate from the business transactions. If the business is paying for your health insurance premiums, you are mixing personal expenses with the business. Yes, the premiums are deductible, but they are deductible on your personal return, not Schedule C.

Teri11_2

Level 2

I agree with Rainflurry, that you could not be compliant with GAAP if filing taxes as a Sole Proprietor and that health insurance would be a personal expense for that owner. In which case, I think those premiums would only be deductible on personal tax return if they exceed 7.5% of his gross income (or something close to that, right?)

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