Solved: When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.
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compellingstateinterest
New Member

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

I'm trying to take the deduction on a business that shows a profit, but the net income isn't changing.
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Accepted Solutions
Zbucklyo
Level 9

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

That is correct.  The deduction for health insurance premiums for a self-employed individual are shown on Line 29 of Form 1040 and do not impact your business income.  As pointed out in the previous answer, the free edition of turbotax will not handle the deduction for self-employed health insurance premiums.

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7 Replies
Zbucklyo
Level 9

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

That is correct.  The deduction for health insurance premiums for a self-employed individual are shown on Line 29 of Form 1040 and do not impact your business income.  As pointed out in the previous answer, the free edition of turbotax will not handle the deduction for self-employed health insurance premiums.

View solution in original post

compellingstateinterest
New Member

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

I think I got it, thank you!
Melaine
New Member

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

Remember that the amount of medical deduction you can receive is based on the amount in excess of 10% of your income if under the age of 65 and 7.5% if over that age.  Example;  If your adjusted gross income is $40,000 and your medical bills and health insurance payments total $3,500 you will not get any credit because this is less than 10% of $40,000.  But lest say your medical bills and health insurance payment came up to $5,400, you will receive a deduction of $1,400 as this is the amount over $4,000 (10% of your adjusted gross income). 

However, if you are self employed, you may want to use the self employed version of TurboTax which will allow you to claim that as an expense, which would reduce your taxable income.

compellingstateinterest
New Member

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

I am using TurboTax Home & Business, but on the CD.  Sorry, I'll update my profile.
compellingstateinterest
New Member

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

I see that it appears on the 1040 as a deduction, rather than on the Schedule C.  Maybe this is where my confusion was... I'm using EasyStep...
Zbucklyo
Level 9

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

As I indicated  below, that deduction does not change your net income on a Schedule C - it is taken as a deduction on Line 29 of Form 1040, so it reduces your regular income tax liability, but not your self-employment tax.
compellingstateinterest
New Member

When I try to make a self-employed health insurance deduction, it doesn't change my business income. My other expenses are reducing the income, but not health insurance.

Got it, thank you!
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