Self Employed Health Insurance Deduction

The self employed health insurance deduction is an adjustment to income also known as an above the line deduction because you don t need to itemize to benefit from it.

Self employed health insurance deduction. Irs chief counsel memo 200524001. The self employed health insurance deduction applies to health insurance premiums for yourself your spouse and your dependents. And that will help to keep you healthy and happy in 2019 and beyond. The same types of premiums for their spouses dependents and any non dependent children under the age of 27 can also be deducted.

Hsas allow insureds to pay for medical expenses with pre tax dollars. The self employed health insurance deduction is taken above the line which means it s deducted before agi is calculated resulting in a lower agi in contrast itemized deductions are taken after agi is calculated. Self employed persons can deduct health insurance above the line on the first page of their 2018 schedule 1 which also eliminates the hassle and limitations of itemizing. Self employed health insurance deduction worksheet legal guidance rev.

The premium tax credit which reduces your share of the insurance premiums is based on income you may have some extra credit to claim or have to pay some back when you actually file. If you qualify the deduction for self employed health insurance premiums is a valuable tax break. Other taxpayers can deduct the cost of health insurance as an itemized deduction only if their overall medical and dental expenses exceed 7 5 of their adjusted gross incomes in 2018. If you qualify for the deduction claiming it will reduce your adjusted gross income or agi.

The self employed health insurance deduction depends on what happens on your tax return. Some other tips for claiming the deduction enter your self employment health insurance deduction on line 29 of form 1040. The self employed health insurance deduction is a tax deduction that covers medical dental and long term care insurance premiums for those who are self employed. This includes dental and long term care coverage.

However the irs says you may purchase your health coverage in your own name and still get the self employed health insurance deduction. If you purchase your health insurance plan in the name of one of your businesses that business will be the sponsor. 2014 41 this revenue procedure provides guidance that a taxpayer may use to compute the deduction under 162 of the internal revenue code for health insurance costs for self employed individuals and the premium tax credit allowed under 36b.