Haris Ashley
If you are self-employed and use TurboTax, you can deduct your health insurance premiums on your taxes. This deduction is one of the most significant benefits available to self-employed workers, potentially saving thousands of dollars each year. To qualify for health insurance deductions, you must meet certain criteria, such as being a sole proprietor, independent contractor, or owner of an LLC, S-Corp, or other small business entity. When filing with TurboTax, you will need to input your health insurance premiums in the appropriate section to claim this deduction. This may include Schedule 1 of Form 1040, Schedule A, or other forms and schedules depending on your specific situation. It is important to consult with a tax advisor or expert to ensure you are correctly claiming all eligible deductions.
| Characteristics | Values |
|---|---|
| Where to input medical insurance premium in TurboTax | Input the amount paid for premiums in the appropriate section of TurboTax. This deduction is reported on Schedule 1 of Form 1040. |
| How to treat health insurance as self-employed health insurance as an S corporation owner | Add the premiums to your wage income on your W-2 form, then deduct them by the corporation. Then, enter the self-employed health insurance deduction on your personal tax return. |
| Where to find self-employed health insurance deduction in TurboTax | Click on Forms on the top right, then find Schedule 1 in the left navigation pane. Look at Line 17. |
| How to indicate insurance was part of a self-employed plan | In the 1095-A entry screens, check the box to associate the health insurance with your self-employment. Choose the S-Corp option if your business income is from an S-Corp. |
| Where to input medical, dental, and vision insurance premiums | Open your tax return, search for Schedule A, and click the "Jump to" link. Answer "Yes" to having medical expenses in 2016 and enter your medical expenses, starting with prescriptions. |
| How to input 1095C information | N/A |
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What You'll Learn
Inputting medical insurance premiums for self-employed individuals
If you are self-employed, you may be able to deduct premiums that you pay for medical, dental, and qualifying long-term care insurance coverage for yourself, your spouse, and your dependents. This deduction is one of the most significant benefits available to self-employed workers, potentially saving thousands of dollars each year.
To qualify for health insurance deductions, you must meet certain criteria. You must operate as a sole proprietor, independent contractor, or owner of an LLC, S-Corp, or other small business entity. If your business doesn't have a net profit, you may not be able to claim health insurance deductions for that year. Additionally, you cannot claim the health insurance premium write-off for months when either you or your spouse were eligible to participate in an employer-subsidized health plan. The health insurance premium deduction cannot exceed the earned income you collect from your business.
To input medical insurance premiums for self-employed individuals in TurboTax, you will need to enter the amount you paid for premiums in the appropriate section. This deduction is reported on Schedule 1 of Form 1040. TurboTax will then calculate your adjusted gross income (AGI) based on this deduction, which can significantly reduce your taxable income. This deduction is taken above the line, meaning it applies even if you don't itemize deductions, offering broad tax-saving opportunities.
It is important to note that there may be differences in how different tax filing software handles these deductions. For example, one user reported that H&R Block placed their insurance premiums on Schedule 1 on Line 28 "Self-employed health insurance deduction", while TurboTax placed the deduction in Schedule A under Line 1 "Medical and dental expenses". Another user reported that TurboTax was adding their insurance premium costs to both Schedule-K and Schedule A, when it should only appear on Schedule-K. Therefore, it is always a good idea to consult a tax advisor or specialist to ensure that you are correctly inputting your medical insurance premiums and taking advantage of all the deductions available to you.
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Where to find Schedule A in TurboTax
Schedule A is used to itemize deductions when filing your federal income tax return. You will need to enter more itemized deductions than the Standard Deduction to access Schedule A.
To find Schedule A in TurboTax, you can follow these steps:
- Click on "Forms".
- Once in Forms mode, click on Open Forms at the top left of the page.
- Type in "Schedule A" and click on the result to open it.
It is important to note that Schedule A is only used for itemized deductions. If you are using the Standard Deduction on your federal tax return, there will not be a Schedule A included with your return.
Additionally, when preparing Schedule A, you do not have to complete every line or include expenses in each category. You only need to include those deductions that you are eligible to claim.
If you are having trouble with Schedule A not showing up or printing, you can seek guidance from TurboTax tax experts or the TurboTax Community.
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How to remove insurance premium costs from Schedule A
If you are self-employed, you may be able to deduct premiums that you pay for medical, dental, and qualifying long-term care insurance coverage for yourself, your spouse, and your dependents. This health insurance write-off is entered on Part II of Schedule 1 as an adjustment to income and transferred to page 1 of Form 1040. This means you benefit whether or not you itemize your deductions.
To qualify for health insurance deductions, you must meet the following criteria:
Self-Employed Status: You must operate as a sole proprietor, independent contractor, or owner of an LLC, S-Corp, or other small business entity.
If you are getting a healthcare plan from your employer, your medical insurance premiums are usually deducted from your paycheck. If you are getting health care coverage via the Health Insurance Marketplace, you must pay your first premium directly to the insurance company, not to the Health Insurance Marketplace.
If you are self-employed, you must indicate in the form 1095-A entry screens that your insurance was part of a self-employed plan and you need to link the S corporation to your insurance plan.
If you entered the information from your 1095-A in TurboTax, you must check that it is being counted as a deduction. If not, you must delete that input. TurboTax will generate Form 8962 for the Premium Tax Credit.
If you are a retired public safety officer, you cannot include any premiums you paid to the extent they were paid for with a tax-free distribution from your retirement plan.
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How to link self-employment to health insurance in TurboTax
If you are self-employed and have a health insurance plan, you may be eligible to deduct the premiums that you pay for medical, dental, and qualifying long-term care insurance coverage for yourself, your spouse, and your dependents. This is one of the most significant benefits available to self-employed workers, potentially saving thousands of dollars each year.
To link self-employment to health insurance in TurboTax, you must first ensure that you meet the criteria for eligibility. You must operate as a sole proprietor, independent contractor, or owner of an LLC, S-Corp, or other small business entity.
If you qualify, the next step is to input the amount you paid for premiums in the appropriate section of TurboTax. This deduction is reported on Schedule 1 of Form 1040. You can also enter this information on Schedule 1 Line 17 as an adjustment to income, and the total will then transfer to Form 1040 Line 10.
Additionally, if you have health insurance for your business through the Marketplace, you must edit your Form 1095-A accordingly. Check the box for "I'm self-employed and bought a Marketplace plan." This will automatically add your premium payments to the business you connect with Form 1095-A and will not include them in your Schedule A itemized deductions.
It is important to note that you cannot claim the health insurance premium write-off for months when either you or your spouse were eligible to participate in an employer-subsidized health plan.
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How to input medical insurance premium for >2% shareholders
If you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental, and qualifying long-term care insurance coverage for yourself, your spouse, and your dependents. This is also applicable if you are an S-Corp owner. To qualify for health insurance deductions, you must meet certain criteria, such as being a sole proprietor, independent contractor, or owner of an LLC, S-Corp, or other small business entity.
If you are a more than 2% shareholder in an S-Corporation, the rules regarding the federal tax treatment of health and accident insurance premiums remain the same as per the Affordable Care Act (ACA). However, for tax years after 2013, the ACA imposes penalties on S-corporations that offer non-compliant health plans or fail to meet certain market reform provisions.
In the case of a >2% S-corporation shareholder-employee, health and accident insurance premiums paid on their behalf are deductible by the S-corporation. These premiums are then reported as wages on the shareholder-employee's Form W-2 and are subject to income tax withholding.
To input medical insurance premiums for >2% shareholders in TurboTax, follow these general steps:
- Enter the amount you paid for premiums in the appropriate section of TurboTax. This deduction is reported on Schedule 1 of Form 1040.
- TurboTax will calculate your adjusted gross income (AGI) based on this deduction, reducing your taxable income.
- Ensure that you indicate in the Form 1095-A entry screens that your insurance was part of a self-employed plan and link the S-corporation to your insurance plan.
- The premiums should be added to your wage income on your W-2 form, and then the deduction should be claimed on your personal tax return.
Please note that the specific steps may vary depending on your individual circumstances and the version of TurboTax you are using. Always consult a tax professional or refer to the official IRS guidelines for detailed instructions and the most up-to-date information.
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Frequently asked questions
To input medical insurance premiums in TurboTax, open your tax return by signing in and clicking the "Take me to my return" button. Search for Schedule A and click the "Jump to" link. Answer "Yes" when asked if you had any medical expenses in 2016. You will then be prompted to enter your medical expenses, starting with prescriptions.
Even if TurboTax knows you're self-employed, you must specify that your insurance is linked to your self-employment. Choose the S-Corp option if your business income is from an S-Corp. Specify the months in which you had business income.
Input the amount you paid for premiums in the appropriate section of TurboTax. This deduction is reported on Schedule 1 of Form 1040. TurboTax will calculate your adjusted gross income (AGI) based on this deduction.
Add the premiums to your wage income on your W-2 form, and then have the corporation deduct them. You will then pick up the income on your personal tax return and enter the self-employed health insurance deduction.
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