Privacy Policy by TRUSTe
Auto insurance
Life Insurance
Health Insurance
Home Insurance
Business Insurance
Other Insurance
Compare Free Health Insurance Quotes
Please Enter Your ZIP Code:

Self-Employed Health Insurance Tax Deduction

Those that are self employed often find that when tax time rolls around, they are at a loss of just what they can claim on their deductions and all the taxes that they have to pay in the end. One of the aspects that most people are confused about is their health insurance. The person needs to realize that if they are self employed and are paying for their health insurance that they can deduct this cost at the end of the year for themselves, their spouses and any dependents that are included on the health insurance policy. This helps those that are self employed to make sure that they are getting the most out of their taxes at the end of the year and will not be finding themselves hurting from their choice of going with self employment. So just who is going to quality for this deduction?

Those that are filling out a Schedule F, which is mainly designated for farmers, or a Schedule C, that is deemed the form for all other self employed people out there. Along with those that are in a partnership with someone that are participating in what is considered a LLC, though both people are filling out forms for being self employed are also eligible. And finally, those that are in a S corporation in which they own about two percent of the corporations stock are also eligible to take this health insurance tax deduction. For those that are not sure if they do qualify, they should make sure that they are asking someone else for help, such as a tax accountant or so forth. They will find that this is the best way to find out if they are someone that can qualify for this or not.

The person that does decide to take this deduction needs to realize that they are not going to be allowed to deduct everything that they spend on their health insurance. They must first calculate their health deduction that is allowable. This can be calculated through using your income that you have made from being self employed, then subtract from this the fifty percent of self employed taxes that are being paid in, along with any amount that you are putting in a retirement fund or so forth. The leftover amount that you have from all of this self employment income minus these other deductions is the amount that you can deduct for health insurance. One thing that you are going to want to remember is that if your self employment has been considered a loss by the government, then you cannot deduct the cost of health care. However, you can still deduct some of the expenses related to the health care such as drug costs and visits to the doctor in which you paid a co-payment.

Another factor that is going to limit just how much you can deduct is if you have the chance to participate in a group health insurance plan but simply chose not to. With this in mind, you have to consider how many months that you could have participated in a group insurance plan, and then look at how many months that you paid for self employed health insurance. The difference is the months that you can claim. This is also true if you can be on a health insurance group plan that is offered by your spouses business or so forth, therefore keep these things in mind before filing.

Once you know the ins and outs of this deduction, the person will find that they need to know just where they will make this deduction. On the 1040 form, which is the most commonly used form, the person will be making this deduction is an above the line deduction. They will find that if they are a bit confused that the workbook provided with the form will be something that will help them out greatly.

The health insurance deduction for the self employed is meant to help those that are struggling in small business out. They will find that they may not be able to deduct thousands of dollars, however, every little bit helps when the person is struggling with being self employed and making ends meet from month to month and year to year.

Get FREE Insurance Quotes and Compare Rates
Type of Insurance: Zipcode: Insured?:Yes No
Bookmark and Share
2013 Copyright © Insure4USA.com. All rights reserved. Privacy Policy / Terms of Use