Overlooked Self-Employed Insurance

Overlooked Self-Employed Insurance

Published on January 09, 2023

Overlooked Self-Employed Insurance

When you pulled the trigger and decided to “free” yourself from working for someone and became a freelancer, you probably felt this sense of power.  You can now make the decisions and do the kind of work YOU want to do!  Being a freelancer has many perks; flexibility, opportunities, independence, control, TAX deductions (yay!), and overall freedom!

However, the major downside to freelancing is losing ALL the security benefits that your employer provided in the past. We all know that we need health insurance and that is usually the first thing you would purchase when you “free” yourself.  After getting sick from the sight of their monthly bill for health insurance, many new entrepreneurs stop there.

Life and Disability Insurance are thus easily forgotten as a freelancer, with your “living” benefit being next on the list!

Disability Insurance replaces your monthly income in case you are unable to work.  Ironically, it is the most overlooked but MOST used insurance. After the crazy COVID years, I think we can all agree that anything can happen, especially to our health.  Car accidents, work accidents, ANY accident, cancer, surgeries, carpal tunnel, herniated discs, concussions, and the list goes on and on.

Think about what YOU would do if you couldn’t work.

How would you pay for your home, car, food, bills, etc.  It is a scary thought, and it could change your financial world quickly if you are not insured or prepared.

Here are some interesting stats and facts about Disability Insurance:

  • A 35-year-old has a 50% chance of becoming disabled for a 90-day period or longer before age 65
  • Almost 90% of long-term disability claims are caused by illnesses, not accidents and aren’t work related
  • Average long-term disability claims for group members last 34.6 months.
  • 51 million working adults in the U.S. are without disability insurance.
  • Americans are 5 times more likely to become disabled than die but they are more financially prepared for death.
  • The top 3 reasons for Long-term Disability Claims are Musculoskeletal disorders (29%), Cancer (15%) and Pregnancy (9.4%)
  • More than 375,000 Americans become totally disabled every year.

Disability Insurance is based on your current age and health.  It gets more expensive as you get older and it gets harder to obtain it as your health declines. It can also play a role in tax planning strategies to mitigate your tax debt.

Please click HERE to schedule a free consultation.

 

Return to Blog

Read other blog posts

Primer: When Cancellation of Debt (COD) Income Can Be Tax-Free

Published on December 09, 2024
When a borrower’s debt is canceled, it generally results in a Cancellation of Debt (COD) income, which is taxable under federal law. However, several essential exceptions allow this income to be excluded from taxes, depending on the circumstances. Here’s an overview of when and how COD income can be tax-free: General Rule: COD Income Is […]
Primer: When Cancellation of Debt (COD) Income Can Be Tax-Free

Do You Owe Self-Employment Tax on Airbnb Rental Income?

Published on December 02, 2024
A key question for many Airbnb hosts and vacation property owners is whether they owe self-employment tax on the income they earn from renting out their properties. The IRS addressed this issue in **Chief Counsel Advice (CCA) 202151005**, which provides insights into the treatment of rental income for self-employment tax purposes. However, it’s important to […]
Do You Owe Self-Employment Tax on Airbnb Rental Income?

Are You Cheating Yourself by Using IRS Mileage Rates?

Published on November 25, 2024
Choosing Between IRS Mileage Rates and Actual Expenses for Business Vehicle Deductions In 2022, if you purchased a $50,000 SUV for business use and drove it 15,000 miles (87% business-related), you would have to decide whether to use the IRS standard mileage rates or the actual expense method to deduct vehicle-related costs. The IRS mileage […]
Are You Cheating Yourself by Using IRS Mileage Rates?

The Supreme Court Likely Shook Up Your Buy-Sell Agreement

Published on November 11, 2024
The U.S. Supreme Court’s recent decision in the Connelly case significantly impacts businesses that utilize buy-sell agreements funded by life insurance for shareholder succession. This ruling may affect estate tax liabilities and the valuation of company shares when a shareholder dies, prompting companies to reconsider their agreements. Background on Buy-Sell Agreements Buy-sell agreements are essential […]
The Supreme Court Likely Shook Up Your Buy-Sell Agreement

The Department of Labor Makes It Harder to Hire Independent Contractors

Published on November 04, 2024
The U.S. Department of Labor (DOL) is tightening regulations around the classification of workers, making it more challenging for businesses to classify workers as independent contractors instead of employees. This shift is primarily aimed at ensuring more workers receive protections under the Fair Labor Standards Act (FLSA), which mandates minimum wage and overtime pay. FLSA […]
The Department of Labor Makes It Harder to Hire Independent Contractors

BOI Latest Updates for Dissolved and Disregarded Entities

Published on October 28, 2024
As the deadline for filing Business Ownership Information (BOI) reports approaches, businesses must ensure compliance with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Understanding the specific requirements and recent updates is critical to avoid severe penalties. Filing Deadlines Businesses that existed on January 1, 2024, are required to file their BOI […]
BOI Latest Updates for Dissolved and Disregarded Entities

Tax Reform: Entity Choice—Proprietorship or S Corporation?

Published on October 21, 2024
The recent tax reforms have introduced new considerations for high earners in choosing their business structure, particularly regarding the benefits of operating as an S corporation. The key incentive is the Section 199A deduction, which allows qualifying business owners to deduct 20% of their qualified business income (QBI). This article delves into the implications of […]
Tax Reform: Entity Choice—Proprietorship or S Corporation?

Update on State Pass-Through Entity Taxes Beating the SALT Cap

Published on October 14, 2024
State pass-through entity taxes (PTET) have become a prevalent strategy for businesses across the U.S., allowing them to bypass the $10,000 annual limit on state and local tax (SALT) deductions imposed by federal tax law. The primary advantage of PTETs is that they enable owners of pass-through businesses—such as multi-member LLCs, partnerships, and S corporations—to […]
Update on State Pass-Through Entity Taxes Beating the SALT Cap

Understanding Estimated Tax Penalties: How to Avoid Costs and Comply with IRS Rules

Published on October 07, 2024
In the United States, the tax system operates on a “pay-as-you-go” basis, requiring taxpayers—individuals and corporations—to make tax payments throughout the year based on income earned. This system ensures that tax liabilities are paid incrementally rather than in a lump sum at year-end. Payments can be made through withholding from wages or estimated tax payments, […]
Understanding Estimated Tax Penalties: How to Avoid Costs and Comply with IRS Rules

Leasing vs. Buying a Business Vehicle: Which Option Saves You More?

Published on September 30, 2024
When deciding whether to buy or lease a business vehicle, evaluating which option costs less involves more than just comparing initial and ongoing expenses. The decision should account for available cash, tax benefits, and the time value of money. The Key Differences Between Leasing and Buying Buying: When you purchase a vehicle, you own it […]
Leasing vs. Buying a Business Vehicle: Which Option Saves You More?