I am self-employed, and I recently found an affordable health insurance plan. Today, my husband was looking around on the internet, and he found some very interesting information. It turns out that people who are self-employed can include their premiums as a tax deduction. This is excellent news!
The easiest way to find health insurance coverage is to be fortunate enough to have a job that comes with a health insurance benefit. Once a worker qualifies for their company’s health insurance plan they are assured of being approved for it.
People who are self-employed have to put in a lot more effort in order to have health insurance coverage. There isn’t an employer who is going to find us an affordable plan. Instead, we have to seek out information from various private insurance companies all by ourselves, in the hopes of finding a policy we can afford. Or, we can hire an insurance broker to help with that. Once a plan is found, there is no guarantee that the insurance company will chose to approve our applications.
A little over a month ago, I was lucky enough to find an affordable health insurance plan. This is the first time since I lost my job in 2009 that I have had health insurance coverage. To be honest, I hadn’t really thought much beyond finding insurance and figuring out a way to make sure I could continue to pay for the premiums.
Today, my husband was looking around on the internet to see what he could learn about tax deductions. He discovered something really helpful! It turns out that people who are self-employed can use their premiums as a tax deduction.
The Small Business Jobs Act allows self-employed taxpayers to deduct the cost of health insurance for themselves and their families. There are some exceptions. You can’t use do it if you were able to participate in an employer-subsidized health plan. This includes one that could, potentially, come from your own employment or from the employment of your spouse. There is a limit. You cannot claim a tax deduction that exceeds the earned income you get from your business.
According to TurboTax, self-employed people can deduct the premiums that they pay for medical, dental, and (some) qualifying long-term care insurance coverage for themselves or for their spouse or dependents. You enter this health insurance write-off on page 1 of Form 1040.
As far as I can tell, this means that I can use the premium payments from my newly purchased health insurance as a tax-deduction. This is very good news! Now, I just need to remember to hang onto the billing statements from my health insurance company.
Image by Ken Teegardin on Flickr