The exact percentage of medical insurance payments that the self-employed can deduct will depend on the medical expenses incurred as well as their tax filing status. According to the IRS, self-employed taxpayers can generally deduct 100% of their medical and dental expenses as an adjustment to income. That means self-employed taxpayers can deduct the cost of health insurance, long-term care insurance, prescription drugs, medical visits and expenses, and Medicare Part B and Part D premiums.
The IRS also allows self-employed taxpayers to deduct the total amount of premiums paid for qualified long-term care insurance as an adjustment to income. The IRS also allows a deduction for premiums paid on health care insurance plans, such as those purchased through an exchange or a private insurer.
To take a deduction for medical expenses, self-employed taxpayers must itemize their deductions on their tax returns. To do so, taxpayers need to complete and file an IRS Form 1040 and Savings and Schedule A. It’s important to keep in mind that the total amount of medical expenses for the year must exceed 10% of the taxpayer’s adjusted gross income for the deduction to be taken.
Keep in mind that the exact percentage of medical insurance payments that the self-employed can deduct may vary from year to year depending on the taxpayers’ filing status and the total amount of medical expenses for the year.
