Good News/Bad News – Changes in deducting health insurance

Posted on January 24, 2011

0


The good news is the self employed individual can now deduct health insurance in calculating the self employment tax (social security).  Rather than making it obvious and putting it as a line item on the schedule C where you report all business deductions, the IRS conveniently hid the deduction over on the self employment tax calculation form.  The bad news is you used to be able to discriminate and just pay health insurance on some employees and not others.  For health insurance plans that renew after September 22, 2010 there is a $100 per day excise tax penalty if your plan discriminates.  Generally the plan must now benefit 70% of all employees with special rules requiring employees to get what owners get.

Advertisements
Posted in: Uncategorized