Tax Savings for The Self Employed - Part 1

I am currently reviewing a potential client's tax returns for the prior three years to identify opportunities for minimizing their tax liability. One of the first places I look is for the Self Employed Health Insurance deduction. While this deduction is routinely included by tax professionals, it is also an indicator of additional opportunities for tax savings.

This deduction saves the taxpayer the cost of their premiums paid (including dental and long-term care coverage) multiplied by their marginal tax rate. For example, a taxpayer in the 24% tax bracket with $10,000 in premium expense would save $2,400 in taxes. However, there are programs available that can include the self-employment tax (an additional $1,530) plus nearly 40% on co-pays, vision and other out-of-pocket health expenses.

This cost savings represents the low hanging fruit for professional tax planners. Check it out ... you can start your savings this year. Contact us if you have questions.

Gary J. LaRoy

www.TaxProEZ.com