This may be useful info for any small business owners out there.
Improved Health Insurance Deduction: (for one year)
Generally, small business owners may not deduct the cost of health insurance when calculating self-employment tax. Under the Small Business Jobs Act, and subject to specific statutory limitations (i.e. deduction is not available if self-employed individual is eligible to participate in an employer-subsidized health plan maintained by the employer of the taxpayer or the taxpayer’s spouse), business owners can deduct the cost of health insurance for themselves and their family in the calculation of their 2010 self-employment tax.
I had to read the link to figure out what they are talking about because a self employeed person has always been able to deduct the cost of health insurance from income (only if net income is made after expenses). I'm not sure if you can deduct the cost of your family's insurance too.
But for 2010, it looks like you can also deduct the cost of health insurance from your total income when calculating what Social Security and Medicare taxes you owe. So that will save you even more.
I did see one great tax savings they have for 2010 only, and now that I've found it, it's too late to act on it. And it also shows how complicated laws like this make doing your taxes.
They have a 100% exemption on capital gains for stock profits for certain small businesses. But you have to know which business applies, and you had to purchase the stock between Sep 27, 2010 and Jan 1, 2011. Plus you have to wait 5 years to sell the stock, and then remember 5 years later that any profit is exempt from capital gains tax. Talk about highly restrictive and too complicated!
Just reading all the gibberish in the link makes me again realize just how much time our government makes businesses waste in calculating taxes. And it's really tough being self employeed.
But even though I didn't like the Stimulus Bill, I will admit it contained a lot of tax breaks. But only for those who have the time and exert the effort to figure them out and take advantage of them.
More tax news, this time Colorado online sales tax.
U.S. District Court Judge Robert Blackburn granted the injunction, which prevents Colorado from enforcing a new state law that requires out-of-state, Internet retailers to report online transactions to the Colorado Department of Revenue.
