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How do I claim the self-employed health insurance deduction for partners and LLC members?

by Intuit Updated 4 months ago

General partners and LLC members who are considered general partners can claim the Self-Employed Health Insurance (SEHI) deduction as an adjustment to income on Schedule 1 of Form 1040, rather than a itemized deduction on Schedule A. This is more advantageous because medical expenses claimed on Schedule A aren't deductible until they exceed 7.5% of your adjusted gross income.

A policy can be either in the name of the partnership or in the name of the partner. The policy can include you, your spouse, dependents, and any children under age 27 who are not dependents.

You can either pay the premiums yourself or the partnership can pay them and report the premium amounts on Schedule K-1 in box 13 with a code M.

Follow these steps to get the SEHI deduction on your Schedule K-1 in TurboTax:

  1. Open your tax return, if you haven't already.
  2. Select Search and enter Schedule K-1.
  3. Select Jump to Schedule K-1.
  4. On the Did you receive any Schedules K-1? screen, select Yes.
  5. Select Start next to Partnerships/LLCs (Form 1065).
  6. Continue to answer questions about your partnership.
  7. If your partnership paid for the SEHI, your K-1 should have an amount for box 13 with a code M and box 14. Indicate such on the Check boxes that have an amount or are checked on the form screen.
  8. Continue to answer questions about your partnership until you get to the the Describe the Partnership screen.
  9. If you paid your own insurance premiums, check the box next to I personally paid health insurance and/or long-term care insurance premiums for myself and my family.
  10. On the Any Self-Employed Insurance Costs? screen, enter any amounts you paid personally.

Note: Your deduction for SEHI may be limited by the amount of the self-employed income reported by the partnership (less the self-employment tax on that income).

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