More Self Employment Tax Breaks For Small Business Health Insurance

Health Reform and Small Business

Just when it looked like all of the health reform changes were not doing much to help most small businesses owners, it seems like we may have missed something which can make a large impact on our total tax bills. Since 2003, self employed people could deduct health insurance premiums from their taxes. This only seems fair since employees with group plans did not have to pay taxes on company contributions and large employers certainly got a tax break. But was it fair enough?

USA Today reported that the average family health insurance policy costs about $14,000 a year. Keep in mind, this is the total cost. If you are employed by a company that offers group heath, your employer may pay part of this cost. However, if you are self employed, you probably foot the whole bill. 

Since 2003, you could deduct that $14,000 (or whatever amount you paid)  from your earnings as an income deduction.  Of course, your own family premiums will vary because of the age, health, and number people in your family, plus the type of coverage you purchased and where you live.  

Self Employment Taxes

The rules have changed so self employed people get another break for 2010 federal tax returns. Self-employed individuals pay 15.3% of their net earnings which is known as the self-employment tax. Employees usually share this burden with their employers. This tax covers social security and Medicare.

Deduct Health Insurance Premiums From Self Employment Taxes

For your 2010 taxes, you can also deduct health insurance payments from self employment tax too.  This new deduction should lower your tax bill even more.

Are Your Tax Forms and Tax Software Updated With 2010 Tax Changes?

Make sure your tax forms are updated with these changes because it can provided a timely and much applauded benefit to self employed individuals such as real estate agents, insurance agents, consultants, etc. Some forms and online programs were not updated, and so taxpayers were urged to wait a while before filing.

You can find the IRS information about 2010 Self Employment Tax Health  Insurance here.

Related posts:

1. Medicare Changes for 2010
2. Health Reform: Health Insurance Exchanges Explained
3. The Best Health Plan For You!

Understand Business Owner Policies (BOP)

It is actually easy to understand business owners policies (BOP). Compare them to personal homeowners insurance policies. A home policy covers property, buildings, and liability. It actually packages different types of coverage into one policy, and only one premium must be paid every month.

You can tailor a BOP to your own unique business needs too. Compare that to the way you can adjust limits on a home policy to make sure you have enough coverage for personal property.

Insurers market different packages, and they can be custom made for some businesses, but there are some typical packages.

Coverage for property, like buildings, inventory, and equipment, is typcial.

Consider your liability needs. Your business may need professional liability or protection against a claim that an employee has caused damage to a customer.

Protect your business against theft. This could include burglaries, or even inside theft from employees.

Coverage for liability in case a customer claims damage from an injury on your property.

Business Cars – Protect your company vehicles.

Sometimes a BOP may include specific coverage for a particular business, or you may need to purchase them on their own. A discussion with a qualified business agent or company will help you understand what your unique business needs, and what other similar companies in your area buy.

Why is the BOP a Popular Choice for Small Business?

It is just simpler to combine coverage, rather than have to keep up with several policies. Many small businesses choose to buy a package like this.

Some examples of small companies who are interested in a package deal would be dentists office, beauty salons, stores in strip shopping malls, and sandwhich shops. Some home business owners who have outgrown their personal homeowners policy also turn to one.

Look For a BOP

In the old days, all a busy business owner could do would be to call around and set appointments with multiple insurance agents to find local coverage. These days, online quotes and forms can speed up the process.

Find Business Owners Policies in your local area with a fast and free safe business owners policy quote.

Related posts:

1. Type of Small Business Insurance
2. Small Business Car Insurance
3. Home Business Insurance To Think About