We have no employer-sponsored plans available; COBRA continuation was exhausted.
Self-employment income exceeds the premiums paid.
No subsidy on the marketplace purchased plan; we paid full freight on the premiums.
Yes, your wife's health insurance premiums are deductible as a business expense.
Here's how to report that business expense:
- Open your return and click Federal Taxes>Wages & Income.
- Continue to How do you want to enter your business income? and click I'll choose what I work on.
- Select Update for Business Income and Expenses
- Select Edit next to the business
- Scroll down to All Other Expenses and select Start or Update
- Select Start or Update for Self-Employed Health Insurance Premiums
As a self-employed person, you're allowed to deduct premiums up to the amount of your net business income; the premiums will appear on Line 29 of your Form 1040. Any payments that exceed your net business income will flow over to Schedule A as a personal medical expense. We'll automatically handle the line items and calculations for you.
The Box next to the Self-Employed Health Insurance Premiums line in Other Expenses for the business just wants me to type in a number; it doesn't have a start or update button.
The Learn More link for that item states "Do not include health insurance purchased through a Health Insurance Marketplace (also known as an exchange). These premiums are entered on Form 1095-A in the program."
At the bottom of Form 1095-A (forms view) is the Business Related Premiums Information Smart Worksheet box, where my wife's Sched. C business is selected. By "related", do they mean "apply these premiums against this income"? If so, we're good! We would have purchased the coverage regardless of having the business income or not, and I'm a bit unsure about the meaning of "related" here.
Is one place better than another or does it matter? I have form 1095-A and have placed it in the Health Insurance tab.
To enter your Form 1095-A -
- Click on Federal Taxes (Personal using Home and Business)
- Click on Deductions and Credits
- Click on I'll choose what I work on (if shown)
- Scroll down to Medical
- On Affordable Care Act (Form 1095-A), click the start or update button
Or enter 1095-a in the Search box located in the upper right of the program screen. Click on Jump to 1095-a