Accounting for prepaid Insurance in QB

[lelepu]

As S Corp I buy General Liability and Worker Compensation Insurance policies that are one year policies with the policy term not coinciding with my fiscal/ tax year (I am forced to buy Work comp policy even though I am the single owner employee since my client insists so; it is money down the drain).

At the end of the tax year, I deduct the portion of the premium for the policy term in that tax year as a deductable insurance expense and carryover the rest of the premium as a current asset in my balance sheet to the next year. I write it off completely when the policy term ends and start the cycle again for the next policy term.

Is this practice correct or are there other alternatives? Any issues?

Thanks

[adrian_in9@yaho]

The Baltimore Life Insurance Company has served seven generations of policyholders. Baltimore Life has made its name through the years by building and preserving high-quality assets.
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