Starting your own business is a difficult and bumpy road that, when it goes well, is tremendously satisfying. Without a doubt, being autonomous is quite an adventure, since the many hours that you have to work are added to the multitude of obligations, both fiscal, administrative and accounting, which are self-employed.
However, not all are tax burdens for the self-employed, but they can take advantage of different tax benefits and certain deductions to lighten the tax obligations they have, such is the case of medical insurance. Definitely, self-employed workers need a health insurance that covers them in case of sick leave due to accident or illness, since, in that situation, they would not generate income and would not obtain a salary.
However, before deducting health insurance as a self-employed person, it is essential to contract a health insurance policy that adapts to the needs and characteristics of the worker. For this, it is best to have the services of Insurance experts with extensive experience in this sector. Euroteide Insurance is an insurance consultancy in the south of Tenerife that, with more than 25 years of experience in the Insurance sector, will put all its experience and trajectory at the service of the client who wants to find a Health Insurance, for an Home insurance or Self-employed insurance, among other products.
Who can be deducted from the medical health insurance
If you have health insurance and are autonomous, it is possible to take advantage of certain tax benefits and pay less taxes when filing your income tax return. So that, It is possible to deduct the payment of health insurance premiums for personal income tax purposes. However, can anyone deduct health insurance on their income tax return? Who can take advantage of this tax benefit?
Self-employed under direct estimation regime
In accordance with Law 35/2006 on Personal Income Tax, it is possible to deduct health insurance, even when said policy is not related to the activity of the self-employed worker. In this case, the applicable deduction is the one corresponding to the following premiums:
- The self-employed insurance premium.
- The premium of the self-employed spouse.
- The premium for the self-employed's children, provided that they are under 25 years of age, live with them and do not receive income that exceeds 500 euros.
This deduction represents a fairly significant reduction in the taxable income of personal income tax.
SMEs and companies that are taxed by Corporation Tax
Also small and medium-sized companies and all those that are obliged to pay taxes on Corporation Tax may deduct 100% of the health insurance premium of your employees as social spending. However, this deduction operates for Corporation Tax purposes, subtracting from the income that the entity has experienced.
This deduction is of great importance, since there are freelancers or small entrepreneurs with several employees who can benefit from this deduction.
How much does a self-employed health insurance deduct?
Although the health insurance deduction is possible in the self-employed income statement, it will have a limit: The self-employed person may be deducted up to 500 euros per year due to the premiums paid to the Insurance company. Thus, as a maximum, the taxable income of personal income tax may be reduced by 500 euros per year. Nevertheless, the maximum limit of the deduction will be 1500 euros if the self-employed person is a person with a disability.
If the price of the medical insurance exceeds that maximum limit of 500 euros, the rest will be taxed as income in kind. This is: let's imagine that a self-employed person has taken out a health insurance policy for which he pays 650 euros per year. 500 euros per year may be deducted from the income tax base. The 150 euros remaining from the Health Insurance premium will be taxed as income in kind.
How to deduct health insurance if you are self-employed
In order to deduct the health insurance in the income statement it is essential submit a series of documents during the year on which the income statement will be made. It is therefore It is vitally important to keep all documentation related to Health Insurance, so that the contracting of the policy can be accredited and justified. The following documents must be presented:
- The insurance policy in which the particular conditions of the Insurance will be justified. In addition, it is essential to keep this documentation in case it is necessary to provide it.
- Bank receipts that prove the payment of the insurance premium. In this case, it is vitally important that it is clear what amount of the medical insurance policy is attributed to each insured, since it must be remembered that the self-employed person may also deduct the premiums of his spouse and of his children under 25 years of age who live with him and have no income.
The self-employed who are entitled to this deduction must present the IRPF form 130. In any case, in order to deduct this expense, it is necessary that the insurance payment has been carried out, is accounted for and that it is sufficiently justified through the different documents that we have already mentioned.
Health insurance is a great option for the self-employed, since they will be covered in case of illness. This is especially important, since freelancers only get paid when they generate profits, and this only happens when they carry out their professional activity. Thus it is essential to hire a good health insurance for the self-employed that is fully adapted to the needs of the self-employed worker and those of his family and has all the conditions required.
To find the best health insurance for the self-employed, the ideal option is to have the services of a good insurance consultancy, such is the case of Euroteide Seguros. Euroteide Insurance is an Insurance consultancy that resides in the south of Tenerife and that, with more than 25 years of experience and good work in the Insurance sector, you will get the insurance that best suits you and your needs.