One of the biggest tax breaks for self-employed business owners is the deduction for health insurance premiums. If you show a net profit on your Schedule C and you paid premiums for medical, dental, or qualified long-term care insurance for yourself, your spouse, and your dependents, you get a special deduction.
It’s not actually a deduction you take on your Schedule C, but it’s an adjustment that you subtract on the first page of your 1040. This is much more valuable than taking the premiums as a medical expense on Schedule A.
Why?
The deduction reduces your taxable income dollar by dollar.
You don’t need your medical expenses to be more than 7.5% of your adjusted gross income to get this benefit.
You can get this write-off even if you take the standard deduction.
It gets better
New for 2010, you can deduct the amount of health insurance premiums before you calculate your self-employment tax. That’s huge! For example, if your medical insurance premiums are $200 per month, you’ll save over $350 in SE tax this year.
Want more details?
My new guide “How to Save $1000’s on Your Taxes” explains money-saving tax tips for Internet marketers, affiliate bloggers, and other self-employed on-line business owners. It walks you through Schedule C, step-by-step, line-by-line. It includes all the latest tax changes for 2010. And as a free bonus, you also get a copy of my eBook explaining the home office deduction.
You can get it now for only $35.
That’s probably less than you’ll spend on your grande mocha or chai latte for the next three weeks. Better hurry. Your tax return is due April 15th and I know you don’t want to pay Uncle Sam a penny more than absolutely necessary.
Click here to get your copy.
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