How Do I Get Health Insurance and File Taxes for My Home Business?

Trisha Miller  | 

When it comes to the technical aspects of a business, like taxes and insurance, things can get a bit complicated. Especially for a new business owner, all of this can become quite overwhelming. You might not know where to look for healthcare plans or what you need in order to file taxes. However, we are here to clear all of that up for you! Today, we’re going to break down each step to finding your perfect healthcare plan, as well as setting you up for success during tax season.

Home business health insurance options: which one is best for me?

If you’re new to the home business world, you might be wondering what kinds of health insurance options are out there for you. Starting your own business and ditching the convenient company-offered plans you may have had access to in the past might sound scary, but don’t worry. Getting set up with your own insurance plan is a breeze. You’ll just need to know the basics about what kinds of plans are offered and which ones fit your needs, and the needs of your employees (if applicable).

Health Insurance for Freelancers

Depending on the official status of your business, you’ll need to select health insurance accordingly. For example, if you’re operating a freelance business under a name, but you haven’t technically filed ownership of a solid business, you still count as an individual, not a business entity. In this case, you’d need to shop around for the best individual healthcare plans that your state has to offer. If you head over to your state’s healthcare website, you can learn everything you need to know about individual plans that cover you (and other family members if necessary).

Health Insurance for Small Businesses

On the other hand, if you have filed for your business and are able to claim it on your yearly taxes, you’ll have completely different business healthcare plans available to you. In this category, you’ll have a few separate tiers of plans available. You select the coverage options and price point that you want. Most states use these plans to cover one to 50 employees. In addition, they usually offer a couple of different options within the plan for you and your employees to choose from. You’ll need to claim this on your yearly tax forms, but the bonus is that you’ll likely get a business healthcare tax credit for doing so.

Private Health Insurance

What’s more, private healthcare options are marketplaces offered through third party sellers, not directly through your state’s website. They have similar offerings to that of the state offered small business listings, but they are offered independently (though they still comply with all state regulations). Because it is a private offering only for businesses, you might expect higher prices, but potentially better coverage. This isn’t always the case, but that can be an advantage of going this route, you’ll just have to do research on private healthcare providers and decide if what they have to offer is better than the standard state options.

Negotiating with Insurance Providers

Lastly, you can go directly to the source. If you have already done the research, know what provider you like the best, and what plans are perfect for you, you can go straight to that company and ask them for the plan. However, if you’re a new business owner, I suggest that you stick with statewide or private marketplaces. They’ll show you all of your options and they’ll give you all the information you need to know about each plan. If you’re very confident about your healthcare knowledge, you might be able to save some money by going this route and talking to a provider directly. It totally depends on your needs and what that company is offering.

Before you sign up, one thing to keep in mind about business healthcare plans is the fact that you need to sign up during the open enrollment period. If you miss your chance, you may have some options left, but many offerings become unavailable after that time. So, check your state’s website to see when you need to enroll.

How to organize your yearly tax information

First and foremost, save everything that has to do with your business. Filing cabinets and folders on your computer have now become your best friend. If you’re planning on claiming certain expenses as they pertain to your business, you’ll need to keep a record of that too. This means, travelling (including car rentals, gas usage, hotels, etc), business operating space, and even supply expenses.

Do some research to determine what kinds of things you can claim on your yearly business taxes and then see how that applies to you. For example, you may be able to get some money back on your taxes on your mortgage if you’re operating a home business. However, your space needs to be used only for business purposes, nothing else. From there you’ll have to calculate what percentage of your home (square footage) is being used for your business. You can then claim that percentage on your taxes.

How to file home business taxes

If you checked out our How to File Taxes for Your Small Business article, you’ll have all the information that you need. However, let’s quickly go over the basics of what you need to know. You’ll need to know the classification of business that you’re filing for, which will help you find the right forms. In addition, you’ll need to gather all applicable documents for deductibles that you can claim, proof of your earnings, and you’ll need to know exactly when to file.

When to File Business Tax Returns

Many businesses choose to file their taxes quarterly instead of yearly, and you might even be required to do so, depending on your situation. Make sure that you don’t miss those deadlines, or it could mean hefty fines. You might be able to file for an extension if need be. If you don’t think you’re going to make it in time, make sure that you ask for an extension immediately.

Business Structure and Tax Obligations

As far as classification goes, there are three options — sole proprietorship, partnership, and LLC. If it’s just you running the business by yourself, you’re likely a sole proprietorship. However, you can still look into the option of an LLC. LLC stands for Limited Liability Company, which means two things — you’re taxes will be different than that of an ownership and you could be less liable if the business fails (this isn’t absolute in all situations). As for the taxes, LLCs allow owners flexible options for filing taxes. You may choose to claim expenses on your individual taxes, as a sole proprietorship, or partnership. Each option will have their own separate advantages and disadvantages, so make sure that you’ve examined all options.

With a sole proprietorship or partnership, you might have less options associated with your taxes (and more liability in general), but you could be offered more refunds when the time comes. As the clear owner of your business, you are responsible for it and you’re able to claim all the hard work, money, expenses, and supplies you put into it each year (or quarter). Not that LLCs can’t do this, but in general this title legally means you’re a bit more “hands off” than a full on ownership. Each situation, partnership, and business type will vary within these guidelines, so be aware that a certain title could mean something slightly different as it is applied to you.

With that being said, you should feel prepared to go out there and make some serious choices regarding your business, taxes, and healthcare. Yes, there are a bunch of options out there, which can seem overwhelming. However, if you start early and take your time going through everything piece by piece, you can absolutely find the plans and forms that best suit your home business needs.


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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.

This post was updated January 8, 2018. It was originally published January 8, 2018.