Disability Insurance For Small Business Owners
Disability Insurance For Small Business Owners
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Why aren’t self-employed people allowed to contribute to Unemployment Insurance and Disability programs?
As difficult as things are for me right now I’m determined to make a go of being a self-employed administrative professional. I do not understand why the self-employed are not able to contribute to the Unemployment Insurance and Disability programs? America is supposed to value the small business owner and the individual entrepreneur. We pay taxes into Social Security and Medicare so why can’t we contribute to safety net programs that would help us now. I’m young and won’t be collecting SS and Medicare for a long, long time.
Actually you can contribute. All you need to do is incorporate your business or become a limited liability company. Once you do that, you will become an employee of the corporation or llc and will be required to pay state and federal unemployment insurance as a percentage of your payroll.
But a word of caution if you have just started this business and your cash flow is not consistent, I would not exercise that option just yet. Becoming a corporation or llc increases your costs significantly even requiring you to maintain Workers Compensation Insurance even if you have no other employees, plus the cost of the unemployment taxes, additional taxes and forms that must be filed & paid, etc.
I would advise you to obtain the services of a good CPA to advise you further. From personal experience, I can tell you that a good CPA is worth his or her weight in gold and then some.
I hope this information helps. Good luck with your business.