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Updated for Tax Year 2022 • October 18, 2022 09:54 AM OVERVIEW Most self-employed taxpayers can deduct health insurance premiums, including age-based premiums for long-term care coverage. Write-offs are available whether or not you itemize, if you meet the requirements. Deducting health insurance premiumsIf you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental and qualifying long-term care insurance coverage for yourself, your spouse and your dependents.
Eligibility is determined month-by-month You can only claim the health insurance premiums write-off for months when neither you nor your spouse were eligible to participate in an employer-subsidized health plan. For example, if you were single and ineligible for any employer-provided health plan during the last six months of the year because you left your job and started your own business, you can claim the deduction for premiums you paid for coverage during that six-month period. Earned income limitationThe deduction cannot exceed the earned income you collect from your business. For example, if your self-employment activity is a sole proprietorship that generated a tax loss for the year, you’re not allowed to claim the deduction because the business didn't generate any positive earned income. Partners and LLC membersPartners and LLC members who are treated as partners for tax purposes are considered to be self-employed.
Premiums paid to cover your employeesIf your business has employees and you pay health insurance premiums for them, these amounts are deducted on the applicable tax form and line for employee benefit program expenses. For example, if your business is a sole proprietorship, you deduct premiums paid to provide health coverage to employees on Schedule C. Limited deductions for long-term care insurance premiumsHere's what you can deduct this year for long-term care insurance premiums.
The bottom lineIf you qualify, the deduction for self-employed health insurance premiums is a valuable tax break. With the rising cost of health insurance, a tax deduction can help you pay at least a portion of the premium cost. And that will help to keep you healthy—and happy—in 2022 and beyond. TurboTax Self-Employed will ask you simple questions about your life and help you fill out all the right forms. Perfect for independent contractors and small businesses. We’ll search over 500 tax deductions to get you every dollar you deserve and help you uncover industry-specific deductions. Perfect for independent contractors and small businessesTurboTax Self-Employed searches over 500 tax deductions to get you every dollar you deserve. Real experts. Trusted technology.Uncover industry-specific deductions, get unlimited tax advice, & an expert final review with TurboTax Live Self-Employed.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business. |