Self-employed individuals can generally deduct 100% of the cost of their health insurance premiums for both themselves and their family members on their federal income taxes.
The deduction is claimed on the self-employed person’s return as an adjustment to income, which means that it isn’t subject to the limits placed on other types of deductions. This means you can deduct the entire amount of your health insurance premiums, without having to itemize your deductions or limit the deduction to a particular percentage of your income.
The Internal Revenue Service allows self-employed individuals to deduct 100% of their health insurance costs, including premiums they pay for policies covering their family members. However, there are a few restrictions that must be met in order to qualify for the deduction:
• The policy must cover the self-employed person in order for them to qualify for the deduction.
• The policy must be set up as self-employed health insurance, not as group health insurance.
• The self-employed person must make enough income from their business to qualify for the deduction.
• The health insurance premiums must be paid with business funds, not with personal funds.
It is important to be aware of the rules and restrictions in place for this deduction, and to consult a tax professional if you have any questions. For more information, you can read the IRS’s article on the Self-Employed Health Insurance Deduction at: https://www.irs.gov/publications/p502/ar02.html#en_US_2019_publink1000280943