How a self-employed person can pay less in personal income tax thanks to insurance

Image result for self employedWe made progress in the 2014 IRPF campaign and many have already submitted their draft or statement electronically, which this year has also advanced its deadline. But there are also many who, even having made their statement, will wait to present it, the reason, that the result of it is positive.

In order to revert that situation on the present declaration there is no possibility, but there is a possibility to change it for next year. A special case is the self-employed. Unlike the employed worker in whom the withholding is adjusted to his income, the self-employed person has a fixed amount that will be applied to each invoice that this year has gone from 21% to 19%. It will also make quarterly payments on account of 20% of its net income (discounted expenses and withholdings). But this is sometimes not enough and depending on the volume of billing can be found that you must also pay in the annual statement. But to reduce the payment or get a refund, the self-employed has a great ally in insurance.

Thought about the future

One of the best options to reduce the tax bill is through the Insurance Plans Insured (PPAs), a life insurance savings with the guaranteed interest rate and that although it has coverage of death, its main purpose is to constitute a capital or an income to be collected at the time of retirement. This point is very important for the self-employed, since their contribution to Social Security is generally low and with this their future retirement benefit. Taking into account this main purpose, we focus on its excellent taxation. The premiums paid to the PPA, can be subject to reduction in the taxable income of the IRPF, from this year to 8,000 euros a year, provided that this amount does not exceed 30% of the net return of work and economic activities. If so, the limit will be this.

We must not forget that the maximum annual contribution is joint for all social security systems, that is, it includes pension plans, social security mutual funds, insured pension plans, corporate social security plans and dependency insurance.

All are advantages with Health Insurance

Health insurance is also fundamental for the self-employed. The main objective when they are sick is always to recover the work activity as soon as possible and therefore it is necessary to have the best medical attention, quickly and avoiding the waiting lists of the public system. If you also travel frequently, have excellent medical coverage including other related expenses such as moving to our country makes it very important.

To this we add another great advantage, hospitalization benefits that many insurances incorporate and that suppose an additional money that complements the limited provision of Social Security. But those who do not know much are the tax benefits for the self-employed. A private health insurance allows you to deduct up to 500 euros per year in the income tax declaration, including spouse and descendant policies that are under your care.

Having covered benefits as important as health and retirement has its future reward, but also present at the time of rendering accounts with the Treasury.