Your Health and Money: New Tax Deduction for Insurance Premiums

If you’re self-employed, you can add a new tax deduction to your 2010 filing, your health insurance premium.  Finally, your health coverage can save you money.  Sure, health insurance premiums have already been tax deductible for self-employed, so what’s new?  Previously, premiums did not reduce the amount you must pay for Medicare and Social Security tax from your total income.  For those self-employed, if you subtract the health insurance premiums first, it will reduce your income subject to self-employment tax on your 2010 returns.  And that also includes the full premiums you paid for your spouse and children.

“So, for example, if your 2010 income was $80,000 and you paid $10,000 in health insurance premiums, you’ll owe Medicare and Social Security tax on only $70,000.” according to ConsumerReports.

Save money on health? Now that’s what we like.

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One thought on “Your Health and Money: New Tax Deduction for Insurance Premiums

  1. […] Now if you are self-employed, 100% of your premiums are tax-deductible and for the first time for the 2010 tax season, so are Medicare contributions, as we previously mentioned. […]

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