How to Deduct Self-Employed Health Insurance PremiumsAug 26, 2022
Are you self-employed and looking for a way to deduct your health insurance premiums? You're in luck! There are several ways that you can do this, depending on your situation. In this blog post, we will discuss how business owners, S Corp owners, employees, and self-employed individuals can deduct their health insurance premiums. We will also talk about the premium tax credit, which is a tax credit available to some self-employed individuals and small business owners.
As a self-employed individual with a sole proprietorship or single-member LLC, you can deduct your health insurance premiums on your federal income tax return. This includes premiums for medical, dental, and long-term care insurance. You can deduct the premiums even if you do not itemize your deductions. You would not claim your own premiums on Schedule C with your business expenses. Instead, you would report self-employed health insurance on Schedule 1 on your personal tax return. You can deduct premiums you paid for employees on Line 14 of your Schedule C.
If you are a an S Corp owner, you can deduct your health insurance premiums on your business tax return as employee benefit expenses, since you are also an employee of your business. You would simply pay the premiums from your business bank account. On your personal return, you would deduct your health insurance premiums on your personal income tax return. It is crucial to note that you should work with your payroll provider to ensure that any self-employed health insurance benefits are properly accounted for on your W-2 from the company. This will be needed in order to deduct the premiums on the individual return.
The premium tax credit is a tax credit available to some self-employed individuals and small business owners. The premium tax credit can be used to offset the cost of health insurance premiums. To qualify for the premium tax credit, you must have self-employed business income. You must also have an insurance plan that was purchased through the Health Insurance Marketplace. You typically receive a Form 1095-A with your tax documents and you should save it as it contains information your tax pro will need to apply this credit.
We hope that this blog post has been helpful in explaining how self-employed individuals can deduct their health insurance premiums. If you have any questions, please feel free to reach out to us. We would be more than happy to help!