Tax Deduction on Health Insurance for Self Employed Individuals

Saturday, 12 February 2011 14:00 Written by Anderson Insurance Staff

health_insurance_self_employed It is sad to think about how many more people would be able to start their own business and create new jobs in this country if they didn’t have to worry about the cost of individual health insurance. Individual health insurance for self employed individuals is often cost-prohibitive, especially for people with a pre-existing health condition, or those who need to insure their entire family. Fortunately, entrepreneurs will be able to get some relief in the form of a new tax deduction that starts in the 2010 tax year.

A new law that was passed late last year, known as the Small Business Jobs and Credit Act, provides for 23 million self employed individuals who will become eligible to receive an important tax break just by purchasing health insurance. By deducting the new tax credit from an individual’s Self Employment Tax, small business owners will be encouraged to purchase health insurance. With these business owners making up 78 percent of all American small businesses, this is a significant piece of legislation.

In order to qualify for the tax credit on health insurance for the self employed, taxpayers must file a Schedule C or Schedule E that shows their net earnings from self employment. They must also file a Schedule SE and pay self-employment taxes. The health insurance costs being claimed must have been paid during the tax year. By addressing affordability - the single most important aspect of buying health insurance for self employed individuals – this new tax law will be saving small business owners up to 15 percent on individual health plans. The tax savings does have a few restrictions, however, including a self-employment wage limit of $106,800 after which the percentage of savings is reduced.

To learn more about buying Arizona health insurance for self employed individuals, contact Anderson Insurance Services and ask for a free quote.

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Health Insurance for Self-Employed Individuals Can Be Affordable

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Jerry is an Arizona health insurance broker and owner of Anderson Insurance Services. He is an expert in all forms of health insurance and represents many of the major health insurance companies in Arizona. Jerry can help you find the best health insurance for the best price. Don’t go without insurance call Jerry at (877) 868-2203 for a free quote on Arizona health insurance.