Self-employed Health Insurance Deduction

[kaneohe]

This might be old news to most but it was new to me so just in case...............
The self-employed (within limits) can deduct what they pay for medical insurance even if it is a personal policy (even Medicare). Somehow I had the impression from the name that the policy had to be in the name of the self-employed business but that was incorrect.
https://www.healthinsurance.org/obamacare/self-employed-health-insurance-deduction/

 

[jebmke]

This might be old news to most but it was new to me so just in case...............
The self-employed (within limits) can deduct what they pay for medical insurance even if it is a personal policy (even Medicare). Somehow I had the impression from the name that the policy had to be in the name of the self-employed business but that was incorrect.
https://www.healthinsurance.org/obamacare/self-employed-health-insurance-deduction/

Yes. there are some limitations. I think the adjustment cannot exceed the Schedule C income less 1/2 the SE Tax (the SE tax adjustment). So it essentially cannot reduce other income.


I think the SE health insurance adjustment needs to be deducted from the Schedule C income when calculating QBI so it also reduces the QBI deduction.

 

[kaneohe]

More details here.........wksht on p. 91
https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf

yes, as jebmke says, there are interactions and you have to work through the various scenarios (as opposed to thinking about them...........until you get a good intuitive feeling about how all this stuff works). One example TS did suggested that even tho taking the SE health insurance deduction reduced the QBI deduction to 0,the total bottom line tax was lower than if you didn't take it.
Not saying TS is right but hopefully it is but YMMV.

 

[davebarnes]

This why, for 38 years, I have been paying ($300/yr) for tax prep by a professional.

 

[brucethebroker]

This why, for 38 years, I have been paying ($300/yr) for tax prep by a professional.

+1.

 

[gauss]

Many volunteer tax sites can do these self-employed returns too if the complexity conditions are met (ie no loss, expenses under 25,000, no employees etc.)

 

[target2019]

$100 or less TurboTax can do it all. It does take time to collect your business data and parse as necessary to fit the schedules and forms. Lots of knowledge accumulated in past 20 years doing it with software. Before that, brother prepared our taxes and taught me about business.

 

[VanWinkle]

Many volunteer tax sites can do these self-employed returns too if the complexity conditions are met (ie no loss, expenses under 25,000, no employees etc.)

This is true gauss, as I am one of those volunteers.