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Insurance Deduction for Small Businesses, Finally
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- Created on Wednesday, 06 April 2011 14:56
After years of failure to get a tax deduction for health insurance premiums paid by the self employed and by very small businesses, these entrepreneurs will get a one –time shot at it, this year.
The Small Business Jobs Act included the benefit that has long been standard for much larger companies and corporations.
The National Association of the Self Employed (NASE) announced this week that their organization, in cooperation with the Internal Revenue Service, will be publicizing the self-employment tax deduction for health insurance premiums.
The 2010 deduction will put about 15 percent of the premium back in the pocket of the self-employed, said Kristie Arslan, executive director of NASE.
A self-employed person who pays $3,000 health insurance premium or $6,300 for family coverage will save $456 to $962 in taxes with the 2010 deduction, Arslan said.
A health insurance premium deduction is an advantage that larger businesses have had over micro-businesses and the self-employed, she said.
The National Association for Self-Employed is lobbying Congress to make the deduction permanent.
The insurance plan must be established under the business.
For self-employed individuals filing a Schedule C, C-EZ, or F, the policy can be either in the name of the business or in the name of the individual.
For more information see IRS Publication 535, Business Expenses, available at http://www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).
