Insurance agencies
Books and taxes for life insurance agencies.
A big first-year commission on a policy, a much smaller trail for years after, a chargeback if the client stops paying, and agents paid on their own split. Gus sorts all of it, an accountant checks every transaction, and you get one number a month.
- From $197 a month
- An accountant on every transaction
- Cancel whenever
February came in at $12,700. Two policies from last year lapsed and the carrier clawed back part of the first-year commission, so I logged both chargebacks against the original sales.
- Carrier first-year commissionFirst-year commission
- Carrier renewal depositRenewal commission
- Chargeback, lapsed policyCommission chargeback
- Agent split payoutAgent commission splits
- E&O insurance renewalLicensing and E&O
Why your books are different
A life agency's books go wrong in the same four places.
A generalist bookkeeper sees a big deposit and calls it a great month. Your commission is heaped, a large chunk paid up front and a small trail for years after, and any of it can be clawed back if the client stops paying. When the books do not track that risk, a strong quarter can turn into a confusing one later.
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1
First-year commission is not the whole story
A whole life policy might pay 80 percent of the annual premium as commission in year one, then a few percent every year after. Booked as a flat number, it hides how much of this month's income is really a bet on the client staying on the books.
What we doSplits first-year commission from renewal trails, so you can see how much of your income depends on policies staying in force. -
2
Chargebacks show up long after the sale
If a client stops paying premium inside the carrier's chargeback period, sometimes up to two years, the carrier takes back part of the first-year commission it already paid, and it can land as a surprise deduction long after the sale felt done.
What we doLogs a chargeback against the original policy sale, so it reads as a specific clawback, not a random loss. -
3
Agent splits get counted as agency income
The carrier pays your agency the full commission, then you owe your writing agent their split. Counted as one number, it looks like the agency earned it all, when a share was always owed out.
What we doKeeps the full commission and each agent's split on separate lines, so your agency's real take is visible. -
4
MEC and policy-loan activity gets missed
A heavily funded whole or universal life policy can cross into modified endowment contract territory, changing how withdrawals are taxed, and it is easy to miss if nobody is watching premium relative to the death benefit.
What we doFlags heavily funded policies so the accountant can look before a client takes a loan or withdrawal that surprises them.
Your categories
The categories Gus keeps for a life insurance agency.
Set up once for how carriers pay you and what the agency spends. You never pick a category. He does, and an accountant checks it.
Money in
- First-year commissionThe larger, up-front payment on a newly issued policy.
- Renewal commissionThe smaller trail paid on policies staying in force after year one.
- Override incomeCommission on the production of agents under your agency.
- Referral feesPayments from other professionals who send clients your way.
Money out
- Commission chargebacksClawbacks from carriers when a policy lapses inside the chargeback period.
- Agent commission splitsThe share of commission owed to the writing agent.
- Licensing and E&OState license, appointment, and errors and omissions coverage.
- Marketing and lead costsDirect mail, seminars, and lead sources for prospective clients.
- Office and CRM softwarePolicy tracking and client management tools.
What we watch for you
- First-year versus renewal share
How much of the month depends on new sales sticking versus steady trail income.
- Chargeback exposure
Commission at risk of clawback on recent policies, so a lapse does not come as a surprise.
- Agent payout share
What agents keep against total commission, so the agency's real take is clear.
- The set-aside
What you will owe, tracked every month, so April is a number you already knew.
Ask Gus
Things life insurance agency owners ask Gus.
Text him like you would text anybody. He answers in plain English, and when a question is above his pay grade, an accountant looks and gets back to you.
That is a chargeback tied to the policy you sold last spring. I logged it against that original sale, so it reads as a specific clawback, not a random loss this month.
It can affect how the client's policy is taxed if it gets overfunded into MEC territory. I flag heavily funded policies so the accountant can take a look before it becomes an issue.
If they are paid outside payroll and clear $2,000 for the year, yes, by January 31. I keep that running total so it is ready.
The tax side
The tax side of a life insurance agency.
Most of what goes wrong here is timing, a chargeback booked wrong, an agent split treated as agency income, a set-aside built on a heaped first-year commission instead of the real trend.
What your return has to get right
Your accountant signs it, so it gets done right the first time.
- Agent 1099sAny writing agent paid $2,000 or more in 2026 outside payroll gets a 1099-NEC by January 31. Gus keeps the running list all year.
- Self-employment tax and estimatesOwner-agents paid on commission rather than a W-2 pay self-employment tax at 15.3 percent up to the $184,500 wage base, usually in quarterly estimates on April 15, June 15, September 15, and January 15.
- The pass-through deductionMost life agency owners can take up to 20 percent of qualified business income off their taxable income, though the deduction narrows above $201,750 single or $403,500 joint, especially once a heaped first-year commission pushes a strong year higher.
- Modified endowment contract riskA heavily funded policy can lose its favorable tax treatment on withdrawals if it crosses into MEC territory. This is client-level tax exposure, not the agency's own return, but worth flagging early.
Deductions life insurance agencies miss
Your bookkeeper knows what to look for in your statements. You never have to.
- Errors and omissions insurance
- State license and appointment fees
- Continuing education courses
- Policy tracking and CRM software
- Direct mail and seminar costs
- Mileage for client visits
- Office rent or home office share
- Phone and internet for client calls
- Trade association dues
- Background checks for new agents
General information about 2026 federal rules, not advice for your business. Your accountant looks at your actual numbers before anything gets filed.
All year, not just April
A life insurance agency's year, kept every month.
A big sale can carry a quarter, but chargebacks can carry it right back out. Your team keeps you ahead of both. Every month in between, your bookkeeper closes the books and speaks up the moment something looks off.
- January
Plan the pipeline
Agent 1099s go out, last year's return gets started, and you get a monthly set-aside so April is already handled.
- April
Signed and sent
Your return is filed and signed. No surprise bill, even with this year's chargebacks factored in, because the set-aside has been tracking your real numbers since January.
- July
Midyear tally
Where you stand, what you will owe, and how much chargeback exposure is sitting on this year's new business.
- October
Before the push
Gus looks at policy tracking software or office equipment worth buying and anything worth doing before December.
What you get
What you pay depends on what your business needs, and it does not move after that, busy season or slow. No hourly bills, no surprise invoices, no setup fee.
Book a call- Monthly bookkeeping
Every transaction sorted into categories set up for life insurance agencies. You never categorize a thing.
- An accountant checks every transaction
Real review, every month, before your books close. Not a spot check.
- Your business tax return, filed
Prepared, reviewed, and signed by that same accountant every year.
- The monthly number
What you made, what you spent, what to set aside for taxes.
- Your own bookkeeper
A real person assigned to your business, in the app whenever you need them. No hold music.
- On your books all year
Every month, not just in April. Your team speaks up whenever something is worth your attention.
- Cancel any time
No contract. No cancellation call. Your books are yours.
Straight answers
Questions life insurance agency owners ask first.
Can Gus tell the difference between first-year and renewal commission?
Yes. He keeps them on separate lines so you can see how much of your income depends on new sales sticking versus steady trail income.
How does Gus handle a chargeback from a lapsed policy?
He logs it against the original sale it came from, so a clawback reads as tied to specific business, not as an unexplained loss.
My agents are paid on a split of the commission. Does that complicate the books?
No. Gus keeps the full commission and each agent's split on separate lines, so your agency's real take is always visible.
Does Gus flag policies that might have MEC issues?
Yes, when a policy looks heavily funded relative to its death benefit, Gus flags it so the accountant can take a closer look before it becomes a client problem.
Do I need to track chargeback exposure separately from regular expenses?
It helps. Gus tracks how much recent commission could still be clawed back, so a lapse later does not come as a surprise to your cash flow.
My books have years of mixed first-year and renewal deposits with no labels. Can Gus untangle that?
Yes. Send the bank statements you have. Gus sorts commission types going forward, and most owners know where they stand inside a week.
Is a real accountant checking my books?
Yes. You get your own bookkeeper, Gus does the first pass on every transaction, and an accountant checks every one before your month closes. That same accountant prepares, signs, and files your business return. Goatkeeper is not a CPA firm, and we never pretend a person looked when they did not.
What does it cost, and can I cancel?
It starts at $197 a month, depending on what your business needs. No setup fee, no hourly bills, no contract. Cancel any time from the app, and your books go with you.
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What makes a bookkeeper worth paying for Every business we keep books for
Book a call
Pick a time. That's the whole signup.
Fifteen minutes with a real person on our team. They look at where your books are, tell you straight what it takes to get caught up, and get you set up on the spot if it fits.
- $197 a month to start
- An accountant on every transaction
- Cancel whenever