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Tax Deductions for New York Self Employed Health Insurance Plans

May 6th, 2009

 Self Employed Health Insurance PlanIf you are self-employed in New York, and you have a self employed health insurance plan, you can deduct up to 100 percent of your health insurance premium from your income taxes. You will need to calculate how much of the health insurance premium you can deduct. If you work as a freelancer, or you are sole proprietor you are allowed to deduct 100 percent of your self-employed health insurance premium in NY State, from your taxes. When you are in business for yourself you have to pay self-employment taxes; that’s just the price you pay for being self-employed. However, to help achieve tax equity, the premiums you pay out on health insurance for the self-employed, New York residents are allowed to deduct the cost as a business expense.
The premiums for group health insurance for self-employed people can be deducted on the Schedule C, Form 11205, or Form 1065, or you can deduct the premium as a business expense. You would have to read the tax forms to see which way would be the best option to pay the least amount of taxes.
If you own a small business and you employ from 2 to 50 employees, $250 can be claimed by you as a tax credit on every one of your employees. If you own a business, and you have a self-employed health insurance premium you will not be able to deduct this premium from your income taxes if your spouse has group health insurance at his/her place of employment. The reason why you cannot claim the deduction is obvious; it is because you could have been covered under the plan your spouse has at his/her employment.
You may own a small business, and you may get health insurance coverage through your spouse’s group health insurance at his/her place of employment. If this is the case with you, you will not be able to deduct the health insurance premium from your income taxes, because the premium must be in the name of the proprietor of the business. To make a deduction, you must own health insurance for the self-employed in New York. Unfortunately, due to the rising cost of health insurance plans for the self-employed, NY business owners are sometimes opting to be insured through their spouses’ group health insurance, from their jobs. This means a staggering number of small business employees are without any kind of health insurance.

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