Self-Employed Tax Breaks Equal Savings

Any amount of savings at tax time is beneficial for the self-employed, and new tax breaks make it even easier to accrue said savings. Legislation was enacted to allow workers to deduct costs related to paying their own health insurance before payroll taxes are calculated.

As a self-employed taxpayer, this legislation can reap great benefits for you. If you earn around $50k a year, and pay $5,000 annually in health care premiums for your family, this law can save you roughly $750.

Basically, it comes out to be like getting 15% savings on your premiums, saving self-employed taxpayers the most amount of money.

Like always, the tax break is lowered as your income increases, so be sure that you take all these calculations into account. Payroll taxes include Social Security and Medicare taxes which can be a big expense for self-employed individuals, because they are responsible for both portions, employer and employee.

So if you can deduct expenses from health care premiums before your payroll taxes, you’ll lower the amount you’re taxed on. This equals big savings!