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Self-Employed Workers Can Reduce Health Insurance Costs (USA TODAY)

By Sandra Block

The National Association for the Self-Employed (NASE) estimates the provision will save self-employed business owners $456 to $968 in taxes, based on average health insurance premiums.

Keith Hall, national tax adviser for the NASE, says the law addresses an inequity in the way health insurance is taxed. Employers are allowed to deduct their health insurance costs as a business expense, thus lowering the amount they pay in payroll taxes. Meanwhile, employees who have employer-provided health insurance can pay their share of the premiums with pre-tax dollars, Hall says. "For the first time, we are on the same basis for deductibility as everybody else."

"We talk over and over again about access to health care, but the biggest issue for small-business people is affordability," Hall says. "This is a 15.3% savings on the cost of health insurance premiums."

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