Self-Employed Health Insurance Plans–Tax Credit Deductions When Filing In 2011

Self-employed health insurance plans can be both difficult for some business owners to meet, but more affordable for others, all depending on the point at which an entrepreneur may be in establishing their business and, obviously, the success that they have seen in their business. However, many self-employed individuals who have looked for affordable health insurance plans, especially in 2010, may have had certain costs that had to be met alone or as part of a way to insure both themselves and their families.

Yet, self-employed individuals who have paid for their own health insurance plans may be able to claim a tax credit when they file their income tax return in 2011. While there have been various tax breaks for small businesses, some self-employed business owners are, thanks to the Small Business Jobs Acted, able to deduct 100% of insurance costs they paid in 2010 for insurance that was either for themselves or, again, their family.

Understandably, there may be some restrictions for self-employed business owners who have had to provide their own health insurance plan, but according to the IRS website business owners who are not subject to specific statutory restrictions (i.e. deduction is not available if self-employed individual is eligible to participate in an employer-subsidized health plan maintained by the employer of the taxpayer or the employer of the taxpayer’s spouse)” may claim this tax credit for their health insurance costs that were met in 2010.

Small-business owners and entrepreneurs who have had to apply for and pay health insurance premiums for themselves are often in a situation where this can be quite costly, and as a result, it’s hoped that this tax credit will alleviate some of the financial burden that these self-employed individuals have had to face over the past year. Some self-employed individuals are able to acquire an individual health insurance plan or a plan that will allow them to pay costs for themselves and their families, which can be reasonably met on their income.  However, for startup businesses or those who may have struggled in 2010 may not have fared so well.

New companies with business owners who work for themselves and have no option of acquiring an employer group health insurance plan, as an example, have turned to these long-term health insurance plans, if they are affordable, but some have used short-term health insurance as a way to get minimal monthly costs yet be protected in the case that a high amount of medical treatment may be needed. While there are options for self-employed individuals to find health insurance plans that are affordable for their situation, those who have paid for these insurance costs on their own over the past year have been advised, when filing their income taxes in 2011, to see if their particular business situation may qualify them for this tax credit deduction that could help them recoup some of the costs that went toward paying for their insurance coverage.