Health insurance for self employed

[RegisP]

I retired in May 2019 from my full time job but continued to work as a self employed a sports official.   I was able to buy retiree health insurance from my former company.  Can I deduct the cost of this insurance from business income?

[DavidD66 · Accepted solution]

If you have self-employment income, and paid for health insurance with after tax funds, you can deduct the health insurance up to the amount of your net income from self-employment.  Enter the premiums paid in the Business Income and Expenses section for Schedule C.

[RegisP]

Thanks!  My premiums are more than my business makes, but my wife has some self-employed business as  well.  Can I split the amount we pay across both businesses?

[DaveF1006]

Self-employed people who qualify are allowed to deduct 100% of their health insurance premiums (including dental and long-term care coverage) for themselves, their spouses, and their dependents.  You may only use the income from a single business you designate to be the health insurance plan sponsor. This means that you can't split what you paid for your own plan. 

[Sue_Ellen]

Yes, you can definitely deduct that cost from your taxable self-employed income. It will help lower the amount of your self-employment tax. 

[Sue_Ellen]

Definitely deduct what you paid for insurance from your taxable self-employment on schedule C. It will lower your portion of self-employment taxes. 

[Irene2805]

 As DavidD66 indicated, the deduction for self-employed health insurance cannot exceed the earned income you collect from your business.

Premiums for health insurance and long-term care insurance are not deducted on Schedule C.  Instead, they are shown as a deduction from your gross income on line 16 of Schedule 1 on form 1040 [self-employed health insurance deduction].

To enter your self-employed health insurance deduction in please follow these steps:

TurboTax CD/Download 

1. On the Here’s your [business info screen, click on Update next to your business. 
2. On the screen, Your [XX] Business, in the Business Expenses section, click the Start/Update box next to Other Common Business Expenses.
3. Click the Start/Update box next to Insurance Payments.
4. Click the box next to the type of insurance premiums you wish to enter (in your case, Health Insurance Premiums).

TurboTax Online

1. Click on Income and Expenses and then click the Start/Revisit box in the Self-Employment section.
2. On the Here's your [business] info screen, click on the box Add expenses for this work.
3. On the Tell us about any expenses screen, scroll down through the categories, mark an appropriate radio button next to Health Insurance Premiums and click Continue at the bottom of the screen.
4. Enter the total health insurance premiums paid on the next screen, Tell us about health insurance premiums…

For more information, see this TurboTax article:  Deducting Health Insurance Premiums If You're Self-Employed