Tax Tips for 1099 Independent Insurance Agents

Now that you are an independent business professional, or in the eyes of the IRS, a self-employed professional, you can take advantage of the current tax benefits of being your own employer. These tax advantages are typically items that you would not have used when filling your taxes as an employee. These are additional tax incentives. We will evaluate a number of lines from the 1040 Tax form.

• Schedule C EZ Form
• HSA Medical Expenses
• Schedule SE Form
• Schedule SE Instructions Publication 560
• IRS Virtual Classroom
• IRS Small Business And Self-Employed Workshop 
  

1040 Line Items that affect a 1099 Agents / Self-Employed Professionals

Line 12

Business Income or Loss (from Schedule C)

As a self-employed professional, this is where you will record all of your business related income and expenses.

Line 28

IRS Requirements for 2009
	Single Plan	Family Plan
Minimum Deductible	$1,150	$2,300
Maximum Out-of-Pocket	$5,800	$11,600
Contribution Limit	$3,000	$5,950
Catch-Up Contribution (55 or older)*	$1,000	$1,000
* If a spouse is also 55 or older, a second HSA may be established and a second catchup contribution of $1000 may be made to that account if desired.

Health Savings account deduction

This deduction allows individual with a qualified high deductible health insurance plan to make tax deductible contributions to a Health Savings Account.

Tips for Making Schedule C Easier

• Keep track of your automobile mileage
• Keep a daily log
• Keep track of all Business Expenses:
• Advertising
• Office Supplies
• Postage
• Business Association Dues
• Business Insurance including E&O
• Licensing and CE Fee

Line 30

One-half of self-employment tax (from Schedule SE).

As a self-employed professional you still have to pay taxes. Currently you are taxed at 15% of your Schedule C Business Income. As a tax incentive to self-employed individuals the government allows you to deduct half or 7.5% from your Adjust Gross Income. You will need to use Schedule C to calculate these earnings. This tax information is used to figure your benefits under the social security program.

Line 31

Self-employed health insurance deduction.

As a self-employed professional, you can deduct 100% of your health insurance premiums as a business expense. You must have positive business earnings exceeding the premiums in order to claim a 100% deduction. Depending on eligibility you may also be able to claim a deduction for your spouse and children. 

Line 32

Self employed SEP, SIMPLE and qualified plans.

As a self-employed professional you can deduct any contributions made to a qualified retirement fund. Plan limits are established by type if fund. As a independent professional you have of number of retirement options SEP’s, Simple 401(k), IRA’s and 401(k).