On September 27, 2010 the Small Business Jobs and Credit Act of 2010 was signed into law. This Act gives the self-employed a one-year tax deduction for health costs in determining self-employment tax. A summary of the Act can be found at www.nase.org/Advocay/NASEinAction.aspx.
• Who can qualify for this one-year deduction?
Self-employed business owners must meet ALL of the following requirements:
1. File a 1040 with a Schedule C or Schedule E with earned income – this would include sole proprietors, single member LLC’s, and sole owner S-Corps
2. Pays self-employment tax on their 1040
3. Pays for individual or family health coverage in 2010
• To take the deduction, the self-employed owner will make the proper adjustments when filing their 2010 1040 for the April 15, 2011 deadline.
When preparing your 2010 taxes, be sure to inquire with your tax preparer or CPA about this deduction, your eligibility, and tax savings.
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