As a self-employed individual, the best way to make sure you have access to the health care services you need is to subscribe to an individual health insurance policy. Purchasing a health insurance policy can seem expensive at first, but you probably are asking is there a self employed health insurance deduction.
Is There A Self Employed Health Insurance Deduction For Your Policy?
Not all health insurance policies make you eligible for a tax deduction. You need to have purchased your health insurance policy on the marketplace. If you still have a policy that you purchased before the marketplace was created and decided to keep this policy, you need to make sure that this policy makes you eligible for a deduction. Replacing your old policy is definitely worth it if you cannot qualify for a tax deduction.
How Much Can You Deduct?
If you have a qualifying health insurance policy from the marketplace, you can deduct the entire amount that was spent on premiums throughout the year. Keep track of how much you spend on your premiums so you can easily figure out the entire amount you can deduct.
How Can You Deduct Your Health Insurance Premiums?
Look for Line 29 when filing Form 2040. You will be able to enter the total amount that you spent on health insurance premiums during the year and deduct it from your adjusted gross income. You will also have to report this deduction on your personal income tax form.
What Is The Premium Tax Credit?
Depending on your situation, you might qualify for a premium tax credit. If you qualify for this credit, you will be reimbursed for a portion of what you spent on your health insurance premiums during the year.
Are There Any Other Health-Related Expenses You Can Deduct?
If your health insurance policy did not cover all your medical needs and you had to pay some medical expenses out of pocket, you can deduct these expenses as well. Fill out Schedule A and list your different health-related deductions. You can use this form to report what you spent on your insurance premiums and on medical bills that you paid out of pocket. Keep in mind that you can only deduct the medical expenses that exceed 10% of your adjusted gross income.
Deducting your health insurance premiums when filing your taxes is very easy. All you have to do is report this amount on Line 29 of Form 40 and deduct what you spent on premiums from your adjusted gross income. Being able to deduct your health insurance premiums from your income makes purchasing health insurance a lot more affordable if you are self-employed.
It is important to make sure that you subscribe to a policy that meets a few requirements and that will make you eligible for this tax deduction. If you are not insured, look into subscribing to a policy since you will be able to deduct what you spend on health insurance from your income when the time to file for taxes come.