SELF EMPLOYMENT TAX

The NASE issued the below letter to the U.S. Senate regarding the amendment process for S. 2237, the Small Business Jobs and Tax Relief Act and the continued debate regarding the President's proposal to extend tax cuts for individuals making $250,000 or less.

Oddly, there was one strategy that Mr. Romney did not use — a full deduction for health insurance premiums that is available to most self-employed people. Read on as the NASE explains why.

Kristie Arslan, Executive Director of the NASE, released the following statement after the U.S. Senate’s vote to repeal the IRS tax reporting requirement...

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.

Kristie Arslan, Executive Director of the NASE, released the following statement on the one-year anniversary of the Affordable Care Act...

Kristie Arslan, Executive Director of the NASE, released the following statement in response to U.S. Health and Human Services Secretary Kathleen Sebelius’ testimony before the U.S. Senate Finance Committee’s Hearing, “Health Reform: Lessons Learned During the First Year.”

The National Association for the Self-Employed said it expected that the new provision would save self-employed business owners anywhere from $456 to $968, on average. It based those numbers on the average premiums paid by single individuals and families.

Democratic Senators Mary Landrieu (La.), Jeanne Shaheen (N.H.), Debbie Stabenow (MI), Evan Bayh (Ind.) and Blanche Lincoln (Ark.) have introduced Tax Equity for the Self-Employed amendment (S. AMDT # 3013), which would allow sole proprietors to deduct as a business expense 50% of their health premium costs. This amendment is under consideration by the Senate for inclusion in the health reform package.

When appearing before Congress, NASE National Tax Advisor and Certified Public Accountant, Keith Hall, has one piece of advice for lawmakers – in order to continue growing and creating jobs, small businesses need to be able to count on a number of tax incentives

The nation's 9 million self-employed—sole proprietors with few or no employees, contract workers, and freelancers—constitute about 8% of the total U.S. labor force, according to the Bureau of Labor Statistics. (The Census Bureau counts 22 million sole-proprietors, but it's not clear how many of those may be payroll workers as well.) "You correct this, think of the widespread health benefit you would give to so many people," says Kristie Arslan, executive director of the lobbying group National Association for the Self-Employed (NASE), which represents the self-employed in Washington.

If you are a self-employed business owner, today you can deduct 100% of what you pay for your health insurance premiums off your adjusted gross income for Federal income tax purposes. It’s a considerable benefit – one that I find is frequently overlooked in media reports about health insurance for the self-employed. I’ve even run into some small business owners – and aspiring business owners – who seem unaware of the provision. And that’s a shame, because it’s a valuable benefit. However, as good as that benefit is, you still have to pay a 15.3% self-employment (FICA) tax on those premiums.