Self Employed Health Insurance Deduction

Self Employed Individuals can deduct 100% of the premiums paid for medical, dental qualified long term care insurance on their tax return. The deduction can be taken as an adjustment to income rather than an itemized deduction on Schedule A. To qualify:

(1) Taxpayer must have reported a net profit on Schedule C

(2) Be a Parnter in a Partnership with Earnings on a Partnership K-1

(3) Be more than 2% shareholder in an S-Corporation and had premiums paid or reimbursed by the corporation and reported as taxable wages on Form W-2. These additional wages are typically not subject to Social Security, Medicare, or Unemployment (FUTA) taxes. 

Sole Proprietors, Partnrs are more than 2% shareholders on S Corporation deduct the expenses on Schedule 1 Form 1040 after calculating the deduction on Form 7206, Self Employed Health Insurance Deduction.