Self Employed Can Easily Reduce the Cost of Health Insurance

Self employed and married?

So far this year, you have lost the opportunity to save a minimum of 15% of the cost of your health
insurance or over $600.

Here’s why:
Individual health insurance for a family of four varies in cost from $500 to about $1,100 a month. If we
use the average of $800, that means you have already lost the opportunity to have saved $600 (15% x
$800 x 5 months). If you do not take advantage of the opportunity I am about to outline, you will lose a
minimum of $1,440 in tax savings this year.

How do I arrive at this kind of savings?

Self employed married individuals are eligible for a tax benefit if they pay for their own insurance under
Section 105 of the tax code. I have personally used this benefit for over seven years saving thousands of
dollars each year – you can too. It’s really quite easy to take advantage of this benefit. What fascinates
me is how few people use this section of the tax code. What’s worse is how few tax consultants know of
this or advise their clients to use this benefit.

Here are the specifics of the tax code stated as simply as possible:
1. To qualify you must either be self employed and married.
a. There are other options, but I want to keep this simple for now.
2. You must pay for your own health insurance.
3. You hire your wife as your assistance and you pay her a modest salary (all deductible of course)
4. Since your wife is your employee, you give her health benefits as an employee benefit
a. And since you are married to her, you get the benefits as well.
5. Since your business is paying for your employee’s health benefits, the entire cost of those
benefits becomes a “Schedule C” deduction – in other words, your gross earnings are reduced
by the total cost of your health care – insurance premiums, dental, vision, drugs, even over the
counter drugs.

That’s it. I said it was simple.

What are the differences compared to what you may be doing now?
Without using this section of the tax code, you could only deduct the cost of your health insurance and
only from state and federal taxes… and what’s missing are your out-of-pocket costs and an ability to
deduct these expenses from your Self Employment Tax.

Finally, you ask, “Where did you get the 15%?”

Again, to keep the illustration simple, I just used the percentage all of us self employed pay for the Self
Employment Tax… 15.3%. Almost nothing counts as a deduction against your Self Employment Tax
except this!
You can get much more information on this at my website: http://tinyurl.com/2brrlcw or just give me a
call at 88-943-3336.

You just cannot want to pay more in taxes than necessary…