How does the Self Employed Health Insurance Deduction Work?
Many people have heard that there is a self-employed health insurance deduction available for income taxes. Here are the basics of how this deduction works and how it can benefit you as a self-employed individual.
Self-Employed Health Insurance Deduction
Currently, the IRS allows self-employed individuals to deduct the amount of money that they pay for health insurance on their taxes. Therefore, at the end of the year, you can total up the total amount of money that you have paid in health insurance premiums, and then deduct that amount from your taxable income. This will lower your tax liability and place you in a lower tax bracket.
Generally, most self-employed individuals will be able to take this deduction. In order to qualify, you cannot be eligible for a group health insurance plan with any employer. Also, you can only deduct the premiums for health insurance if your business earns a profit for that year. If you are operating at a loss, you cannot deduct this amount from your taxes.
With this deduction, you can deduct the money that you pay for your own health insurance. You can also deduct the money that was spent on your family's health insurance.
Can real estate agents deduct health insurance?
Many people have heard that you can deduct health insurance if you are self-employed. However, if you are a real estate agent, you may be wondering whether this deduction applies to you. As far as the IRS is concerned, you are considered a self-employed individual when you are working as a real estate agent. You do not receive a salary from your employer or any benefits. You are not eligible for a company insurance plan in most cases. As long as you are paying for your own health insurance and you are not eligible on your spouse's plan, you can take a deduction.
Does retirement income qualify you for a health insurance premium deduction?
During retirement , health insurance is typically a big financial issue. If you can get some type of discount, it would be in your best interest to try to do so. However, as a retiree, you will not be able to qualify for the health insurance premium deduction. Being retired is not the same thing as being self-employed. If you have self-employment income, then you could potentially deduct your health insurance premiums. Therefore, it may be in your best interest to work on some type of side project that will bring you self-employment income of some kind.Source: m.finweb.com