Tax Deductible Insurance: The Facts

Imagine looking over your expenses from the year, and you calculate not only no refund, but you owe a hefty sum. Your small business is doing well, but not well enough that it can take a heavy tax hit or any other easy mistake. What can you do? Did you take tax-deductible insurance into account?

The savvy business owner works to get the most out of their return. Whether you use a tax app or are a pen-and-paper warrior, each person must hunt for every last tax deduction available to them. This helps puts money back in your business, and money in your business is an investment in its success.

adults brainstorming with post-its on a board — *Brainstorm when you can about deductions for your business. A penny saved is one more in your pocket.*

So, how can you get ahead of the curve? For the self-employed, the small business owners, and even larger companies, certain tax information can be murky. Uncovering the mysteries of insurance premiums and how they fit with taxes can help lower your payments come tax season.

Insurance is a Cost of Business

The IRS’s 2018 Publication on Business expenses states, “You generally can deduct the ordinary and necessary cost of insurance as a business expense if it is for your trade, business, or profession. However, you may have to capitalize certain insurance costs under the uniform capitalization rules.” This means money spent that was necessary to keep the business running necessary business running can be deducted. It also allows for a process called “capitalization” for certain expenditures, which means transforming your insurance premiums from a business “expense” to a business “cost.” The difference between these two is that an expense refers to the usage of an item, whereas a cost is purely money spent.

So, now the IRS has given you the go-ahead. You can take stock of your premiums and capitalize them if needed. When filling out your tax forms, make sure you place the correct amount spent for the year. For example, on a 1040 form, lines 46, 61, and 69 will be used to report your insurance expenditures.

These examples can be used by the self-employed as well. It comes down to locating which coverages you have, how much you spent on them, and if the premiums are deductible. Let’s look at what premiums make the biggest impact on your tax statement.

Only Some Insurance Is Tax-Deductible

You can start crossing off expenses and reducing your tax payment, putting more capital back into your company’s financial reservoir. Here are the premiums that are deductible:

business notes on insurance and other expenses — *Take good notes for these deductions. Tax forms will need accurate information. Celebrate your savings!*

Fire, theft, accidents, storm, or losses similar to these categories
Business interruption
Group Health/medical
Long-term care
Credit insurance coverage against bad debt
Liability
Worker’s Compensation
Malpractice

Other items of note are life insurance, vehicle insurance, unemployment funds, or overhead insurance. Life insurance can be useful here only if it covers you under contract. For your vehicles, they can be deducted (even if one is for personal use) only when used for the business. The payments to the unemployment fund are only counted in this list if they are approved by your state of residence. Also, the overhead insurance comes into play if you have used it for a long period due to a disability.

Non-Deductible Premiums

Payments made for a self-insurance reserve
Loan security
Earnings Loss
Life insurance/annuities not covered above

Another good rule to note is that if you paid for a premium in advance, this is not considered suitable for the current tax year. Remember, if you take out a premium for five years, each year only one-fifth of the payment can be used to offset your expenses. So you can not deduct the entire premium in one year since you are using it over the course of five.

person calculating numbers and stats for their company — *You’d be surprised the intricacies of this process. Don’t worry! Follow our lead, and you’ll be ahead in no time.*

If you are a sole-proprietor or self-employed, there is more good news for you. Your payments for coverages like medical, dental, and long-term care can be included as an expense. However, this is not the case if you “could” have been covered by your spouse for a certain time in the year. If they see you had the option, they will not take the deduction on your taxes.

In most cases, your business’ essential premiums are considered tax-deductible insurance, so they will be useful come next season. Using the list provided, you can cut down on business costs and fill out that revenue line. What could be better than being covered and saving money?

EZ.Insure is help both you and your business. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

Insurance Rates: 5 States You Don’t Want to Start A Business In

We can’t tell you where to live, but if you’re looking into starting a business somewhere, it may be wise to look into the average insurance rate for each state. The average premium can give you the scope. Group health insurance is a benefit you can’t afford to overlook when it comes to your benefits package. Prospective employees will flock to you when you offer this because when you offer health insurance, you offer peace of mind.

open map of the continental united states — *Your location can change your insurance rate a great deal. Make sure to do proper research.*

Each state has a different premium, and getting this information can hint at your prospective insurance costs should you operate there. Health insurance costs are growing with a 214% rise in premiums for single coverage and 239% for family. Of course, EZ.Insure’s agents will have a comprehensive view of your specific situation, but let’s look at the most expensive states to live in.

Why These States Have the Highest Premiums (Without Subsidy)

Wyoming at $865

Some good news here! Wyoming actually saw relief from premium increases this year for their insurance rate. However, this was after a 48% rise in 2018. That’s quite an incline. While this explains the higher cost now, it also gives hope for the future that this number could drop on the list.

Wyoming has been fighting for first place in “Who Is the Most Expensive” between Iowa and Alaska. Differing costs in plans fluctuate as cost-sharing reductions are put mostly on medium rate plans. This hampers attempts to curb this by government programs because their influence usually falls to the lower rate plans.

In either case, Wyoming continues to hold a top-3 spot in the most expensive zone, so not the best state for your company to start. It also doesn’t seem to be getting any less expensive.

Nebraska $838

nebraska sunset over a field with a fence — *It’s beautiful, but Nebraska seems to be an expensive place to live with it comes to insurance.*

In Nebraska’s exchange, there is one insurer that has a complete monopoly on the market: Medica. This isn’t a recent thing either. A monopoly means they can charge whatever they’d like, and those that want insurance must buy it.

2019 showed only a 2.2% increase across the Medica board. It seems small, but because the insurance rate is already so high, any increase is only going to increase pressure on the market and business owners, meaning you.

Iowa at $762

The same problem with Oklahoma carries over to Iowa. While over half of Iowan residents receive health insurance through an employer, the other half do through government assistance. This is good for Medicare and employers that can handle the payments for group insurance. However, for those that cannot, it would be a good idea to take a second look before coming here.

Studies show that businesses in Iowa are going through financial hardship due to these drastic increases in premiums. Percentages of this increase jump wildly through the years with a 19% rise in 2002 to a softer 8.4% rise in 2018. While the rising slows, it should still caution a prospective business owner.

Alaska at $702

This state has a disproportionate population size, and the vast majority of Alaskans live away from the booming cities and markets. What this means is, a lot of people are in remote areas and the road systems don’t reach all of them. This raises the insurance rate because of the danger associated with rural areas.

Coupled with these is a limited amount of medical service providers. If you need a specialist, you may have to travel quite a while to see them, even out of state. These hamper the medical field with more costs and increase the amount the professionals (or specialists) are paid. Altogether, it nets a large increase for your company if you expect to operate here.

Oklahoma at $696

After Alaska (and Texas, not on this list), Oklahoma has a high uninsured rate. This is 13.9% of the populace. With so many people uninsured, it doesn’t leave a good impression for your business here.

Under the Affordable Care Act, this state did not opt into federal funds for expanding health care. This left thousands of people without access. These people continue to go to hospitals when they are sick, putting a strain on health providers.

What does this mean for you? While the insurance rate may be high for your business, offering health care may be an even more attractive choice for a prospective Oklahoma employee. You’ll have to decide whether or not it’s a good idea for your business.

money and medication from health insurance — *Medication is needed everywhere. Health insurance is not something to take lightly.*

When it comes to your business, your insurance rate is important to your bottom line. Most insurance is required. Others aren’t, but they’re still good to have. These states here show with their health insurance premiums what you can expect in the group world. Have any more questions?

EZ.Insure is there to make sure your business is covered. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-615-4893. EZ.Insure makes the entire process easy, and quick.

The Beginners Guide To Worker’s Compensation

Do you know everything you need to know about Worker’s Compensation? It’s not a subject many people discuss at the dinner table, but it’s incredibly important to have when running a business in case someone is injured. A small thing like a loose nail or an unstable walkway could spell trouble.

smiling worker in an office with a be happy sign — *It’s easy to be happy when you know you’re covered!*

Before an accident happens, it’s imperative for a business owner to understand the terms of Worker’s Compensation coverage, how to qualify as an employee, what it covers, and what it will cost you.

What Is “Worker’s Comp?”

This agreement states that as long as an employee receives wage replacement and medical benefits, the employee will not sue the company for negligence. Meaning, if you’re injured on site due to something workplace related, you’ll be covered for the amount of work you miss plus hospital bills. But, you cannot sue the company specifically for failing to take proper care. This protects employers and employees.

It’s state-mandated, and the particulars change based on your location. EZ.Insure’s agents are familiar with this information, local or not, so by calling us, you’re saving some time.

Good news is, safety regulations are solid nowadays.

employees with talk bubbles asking about insurance — *Your employee may have questions for you during this time. EZ.Insure will give you the knowledge to answer securely.*

How Can Your Employee Qualify?

For an injured employee, there are only four checkboxes to qualify:

You must be employed by the company.
Your illness/ injury must be work-related.
Your case must fall in state guidelines.
The employer must have Worker’s Compensation insurance.

What Is / Is Not Covered by Worker’s Compensation?

Workers Compensation insurance covers most workplace injuries, but you may be refused assistance if your injuries are self-inflicted, occurred during a crime, or if your actions during your sustained injury violated company policy. For example, if your employee happened to sustain an injury while robbing you, rest assured their injury most likely won’t be covered.

The injured employee doesn’t need to be injured “on-site” to be covered. Worker’s compensation can also come into place when your injury is sustained, and it’s job-related. This could be if your company plans a trip overseas for a meeting, and your employee happens to break a limb during the outing.

When it comes to your medical expenses, you’ll find support with diagnosis and treatment. Depending on your state, it can also provide disability payments, rehabilitation, or retraining.

This should provide ample cushion for your employees to recover and return to work.

What Are the Costs?

The average cost of a worker’s compensation claim is $38,000 (from 2005). This is a combined total of both the medical side and loss in productivity. That’s a down payment for a house or a mid-size car.

For a company, the average cost per $100 in employee wage ranges from $0.75 to $2.74. It doesn’t seem that bad, but this does depend on the state. If you’re looking into getting this for your company, contact your local office to get specific information.

Do Worker’s Compensation Costs Change Per Business Type?

cranes with people working on construction — Depending on what your company does is how much you’ll be quoted for worker’s compensation.

Depending on your company, the money outflow is going to fluctuate. For example, in the office building, your cost per $100 goes down to about $0.12. It doesn’t sound that bad, but it’s because injuries happen less often in this environment.

If you’re a painter or a landscaper, this average jumps up to $7-9/$100. You’ll have to take a look into the work you’re doing, and how it may affect an employee. Your business needs a strong hand with inside knowledge to provide you with the best quality insurance.

EZ.Insure has the experience to help you excel. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

3 Insurance Headaches EZ.Insure Will Save You From

Insurance Can Be Tiresome. Let Us Help You.

You’re sitting at your desk, scratching the back of your head with at least ten different insurance pages open. Sound familiar? It’d be nice if someone brought you an extra cup of coffee, closed your laptop, and gave you a shoulder rub instead. We can all dream, right? Unfortunately, insurance headaches can happen to anyone.

While shoulder rubs may not be our thing, helping you out with insurance still is. There are some major stress factors on the road of life, and we have three mapped out for you already here. EZ.Insure has solutions for them.

1. Searching: The Exhausting One

business owner stressed over computer with water glass — *Stress can affect your ability to make good decisions. Take care where you focus your attention.*

Searching for policies yourself can leave you stressed and drained. When you’re in that state, it becomes harder to make good decisions. This goes double for business owners; you’ve got a lot riding on you. Why shoulder this entire burden yourself?

Looking at policy lists, companies, and plans will take chunks of time from you. Besides that, you’re handing out information to various companies. Our agents here are capable and willing to do the heavy lifting for you. We take the hassle and anxiety out of this process.

Don’t put yourself in a situation where you could be overwhelmed when a simple email will save you time. One agent can free you up to spend more time on the things you love: your company, your family, your life.

2. Scams: The Crazy One

It’s sad, but there are many insurance scams out there today, one of the worst insurance headaches that could happen. Without the proper information, you could fall for one of these con artists. It wouldn’t even be your fault. How would you have known?

Regardless of knowledge, people are taken advantage of daily. Business scams are prevalent because they prey upon a valid need for increasing revenue. Picture yourself in a bind with a slow month in profits, and you need help. With anxiety clouding your judgment (which is perfectly understandable), you could reach for the first attractive advertisement offer without considering where it comes from, or what kind of “fees” they charge you to start their services. That’s how they get you.

Our agents are reliable, keeping up daily with insurance trends and scams. They’ll make sure to keep you in safe zones so that you don’t have to worry about falling for a con. Losing money is bad, but feeling victimized is worse.

3. Unexpected Disasters: The Big One

business destroyed inside after a disaster — *Walking into your destroyed office building could be a nightmare. Hope for the best, but be prepared for the worst.*

Your entire life can change in a day; you need to prepare for this.

Natural disasters strike, more often than before. Hurricane Harvey hit my area of Texas in 2017, causing $125 billion in damage. Homes were lost, businesses closed, and people were displaced. No one could have accounted for such a massive storm. Who could have predicted it?

Our agents will take the time to address your concerns and find policies that will protect you during hardship. Our business owner’s policy provides you with liability insurance and protection when your property is damaged. Worried about the downtime while you’re making repairs? EZ.Insure offers Business Income/Interruption insurance to help with less profitable months due to disruptions.

Our custom service focuses on saving you time and money. Let us be your support so that you can make an informed decision. We’ll take the insurance headaches away from you.

EZ.Insure is there to make sure you’re not alone. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

Group Health Insurance: The Plans, the Importance, and the Agent

What Types of Insurance are Available and Why They Are Important

You’re ready to take the next step into improving your business through group health insurance plans. You’ve got your employee’s benefits in mind, but also your company’s bottom line. Both are important. So, here are the different types of insurance plans available to your company, and how exactly they’ll help you out.

Fully-Insured Employer/ Large Employer Group

Why You Should Choose This: You’re wanting a solid plan that provides the most coverage. This is if you’re wanting major medical or health maintenance organization (HMO) coverage.
Business planning is all about finding what works for you, insurance or otherwise.

What It Offers: A traditional policy that is common, so more support or offers from agencies. You also party directly to the agency.

Requirements: Just the basic group insurance requirements: be a business of two or more people and enroll during the specified period.

Small Employer Group

Why You Should Choose This: You’re a smaller company or a group in a larger company seeking a cheaper option. Insurance agencies can more accurately predict risks in a smaller group.

What It Offers: Cheaper options with higher coverage and the same policy for each employer.

Requirements: Basic group insurance needs met.

Health Maintenance Organization (HMO)

Why You Should Choose This: You want to pay for specific health services via monthly premiums.

What It Offers: More control when it comes to enrolling for general services.

Requirements: A good knowledge of doctors and care facilities as you will have to stay within a network.

signing life insurance form — *Life, health, and any policy will require some old-fashioned form signing.*

Self-Funded

Why You Should Choose This: You wish your company to be in complete control of the payment for coverage.

What It Offers: More control as your company is the one taking the costs.

Requirements: Basic group requirements

Association Group

Why You Should Choose This: You are not an employer, but you still wish to offer group health insurance to a set of people.
What It Offers: The ability to get group health insurance for a non-business type.

Requirements: Basic group insurance needs met.

Level Funded Plans

Why You Should Choose This: You wish to pay a monthly premium instead of an annual one.

What It Offers: A graduated payment plan instead of a lump sum at one time.

Requirements: Census information will be taken of the group you wish to be insured in order to determine your monthly rate for coverage.

Preferred Provider Organization

Why You Should Choose This: You’re wanting something similar to the HMO plan earlier but with more flexibility.

What It Offers: More choices when it comes to doctors and facilities with the risk of being more expensive due to administrative costs and negotiated services.

Requirements: Basic requirements met.

High-Deductible Health Plan with Savings Option (HDHP/SO)

Why You Should Choose This: You don’t think your employees will use medical services, so you trade higher deductibles for lower monthly costs.

What It Offers: Cheaper options at the expense of your employees. However, this may be paired with a health savings account to counteract the higher out of pocket costs.

Requirements: Basic group insurance needs met.

hands pressed together after business meeting — *Let an insurance specialist help you succeed.*

Your Agent

With all of these to take into account, it can get overwhelming quickly. An insurance agent is specially prepared to navigate these waters and make sure you’re getting the exact plan to fit your needs.

Sometimes, not all employees will want or need this coverage. After you take stock of your company’s team and needs, look to a specialist for a guiding hand.

EZ.Insure offers you another helping hand. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-998-2027. EZ.Insure makes the entire process easy, simple, and quick.

Group Insurance: Plan for Your Company’s Health

When and Why to Get a Group Insurance Plan

So, you’ve got a company, and you’re thriving. As a small employer that’s excellent news! But one thing that’s important for your employees (and thus, important to you) is insurance. Next to an employee’s income, health insurance is the second most important employee benefit. This includes health plans, medical insurance, etc, for both full and part-time workers.

business notebook with planning underlined — *The planning stage comes first before you look into getting insurance.*

One of the biggest factors in the job market out there is insurance, which is paramount to keeping your employees happy. Overall high morale reduces employee turnover, and a stable workforce is one of the greatest predictors of continued success. Guaranteed issue insurance can land your company in a “Best Places to Work” chart. Secure employees equal low turnover.

If you haven’t already, you need to look into a group insurance plan.

But what is it exactly?

What is Group Insurance?

This is a coverage type for a defined group of individuals. Usually, companies will offer health insurance as the primary offering and can supplement to include dental, vision, life or disability insurance.

Group insurance is a leg-up for both the companies and the beneficiaries. Because the companies get a large number of people to cover all at once, they can reduce their rates for said individuals, and the process will go smoothly as they want your business. Wholesale isn’t just for paper towels and bread.

So, in essence, it’s a bigger version of individual health insurance (a single policy) where the company is the individual, and all the employees are separate parts.

When to Acquire?

Technically, if you’re self-employed, you could apply for small group health insurance in some states. For the majority of business owners, you’ll probably be thinking bigger. You can look into this whenever you decide the time is right for your company. Many small businesses realize the benefits of having a group insurance plan, both for the business and for the employees, and opt to look into it sooner than later. .

doctor working with a business person — *The peace of mind that comes from group health insurance is an attractive benefit.*

Remember, the choice is yours to make this step for your business. One differentiation to note is employee number as it puts you in a separate category under the Affordable Care Act. However, this shouldn’t guide your decision.

There really aren’t “milestones” separating you from the uninsured line. When you’re ready to make the investment and are looking for the first time, there is no enrollment period you have to wait for. However, make sure that you start shopping at least 90 days prior to the date you want your insurance plan to be active.

If you feel like you’re wanting to purchase group insurance with a smaller business, one marker would be income. The average annual cost for an employee premium is around $5,000.

So, if you can budget $5,000 per employee per year into your books, it may be well worth looking into.

Why Acquire?

There are many benefits to getting a group health insurance plan:

Your employees will likely be healthier given that they have access to healthcare.

These types of expenses for your business are tax deductible which means putting more money in your pocket.

The aforementioned lower turnover. Happy employees=a stable workplace

As you can see, the benefits will outweigh the costs. You’re going to want to keep your employees happy, and you’ll find support from the government and insurance agencies to smooth the process.

business man giving the thumbs up — *You can do this! You have all the help and support you need.*

Acquiring new insurance and seeking a personalized plan can be difficult and time-consuming. An agent will do the smooth the process, allowing you more time to focus on your business.

EZ.Insure offers you this solution. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected] or calling 888-998-2027. EZ.Insure makes the entire process easy, and quick.

Tag: insurance