Interesting situation. I have a really good job, with really good pay, and just became a partner. I am also a medical director, and local region medical director, both positions of which pay me a stipend aside from my full-time ED pay. All of my income is 1099 to my passthrough S-corporation. I have a very good accountant.
My pay has now doubled, but my taxable personal income (after deductions, retirement, etc) is little changed from where it started. My financial Planner, whom I only use for my disability policy, recommended I ask for the maximum benefit for my state, which is $25,000 per month. I currently have true own occupation coverage with Mass Mutual, and have applied for an additional policy with Principal to total the maximum benefit (stacked).
My benefits are apparently calculated on a net income basis (after taxes). Is there any consideration for the business expenses I write off as a result of my total 1099 income? These are substantial and, since they are corporate, I am afraid that I may not qualify for coverage due to my independent contract status with a passthrough corporation.
Essentially, if I become disabled, I will lose all of my income, my stipends (because I am required to practice), and my partnership status/bonus. I would lose everything, including my pre-tax expenses and lifestyle, and I am concerned I would only qualify for a benefit comparable to my personal net after business deductions and expenses (post-tax income).
Does anyone know if disability benefits consider total income in situations with passthrough corporation, or are they relegated strictly to personal net income?
My pay has now doubled, but my taxable personal income (after deductions, retirement, etc) is little changed from where it started. My financial Planner, whom I only use for my disability policy, recommended I ask for the maximum benefit for my state, which is $25,000 per month. I currently have true own occupation coverage with Mass Mutual, and have applied for an additional policy with Principal to total the maximum benefit (stacked).
My benefits are apparently calculated on a net income basis (after taxes). Is there any consideration for the business expenses I write off as a result of my total 1099 income? These are substantial and, since they are corporate, I am afraid that I may not qualify for coverage due to my independent contract status with a passthrough corporation.
Essentially, if I become disabled, I will lose all of my income, my stipends (because I am required to practice), and my partnership status/bonus. I would lose everything, including my pre-tax expenses and lifestyle, and I am concerned I would only qualify for a benefit comparable to my personal net after business deductions and expenses (post-tax income).
Does anyone know if disability benefits consider total income in situations with passthrough corporation, or are they relegated strictly to personal net income?
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