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Bookkeeping – Income Protection Insurance – Is it deductible and is GST involved?
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Published on Thursday, 30 July 2015 20:10
Many small to medium business people have Income Protection Insurance, and wonder is it deductible and is GST involved. Other don’t realise it is crucial to take their central role as the main source of income seriously and protect it.
Key Income protection insurance
· premiums are generally tax deductible for the business, but
· payments paid are taxable in the hands of the receiver when paid to then.
· NO GST on Income Protection premiums (neither on life insurance or private health premiums, as they are classed as financial services - GST is included in general insurances such as home and car insurance);
· Pay you a lump sum benefit of up to 75% of your gross income if you have become unable to work due to an illness or accident. This is to pay or provide a steady income every month so that you can focus more on the most important thing – your fast recovery.
Income protection can help you pay for your living costs, including:
- Mortgage or rent and debt repayments;
- Basic household maintenance;
- Daily expenses, such as bills and food.
How much income protection you need will depend on your current income – you receive regular monthly payments of around 75 to 80 percent of your average salary, which should be enough to see you through until you can return to work.
Other considerations –
- How long you want the benefits to be paid, which is unknown of course.
- Amount of sickness benefits with your employer (or company or business) you are entitled to, because after that, the income protection insurance can take over, and you want that to be as long as you can afford. So a quote on the payments (premiums) for different lengths of time is required. Income protection cover is
- Usually only available until you are aged 65, depending on the company.
Why not get a quote and know your options? It is FREE and there are no obligations you will be able to compare several offers and the premium prices. Call us and we can refer you to independent brokers in our trusted network who would be happy to assist you. Call today and be prepared! Ph 0407 361 596
Call for FREE 30min advice / strategy session today! Aus +61 407 361 596
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