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Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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My question is about the self-employed deducting Health Insurance

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My question is about the self-employed deducting Health Insurance Premiums.

IRS publication 535 Chap 6 says a self-employed individual with a net profit reported on Schedule C can deduct their health insurance premiums but "the insurance plan must be established or considered to be established as discussed in the following bullets, under the business". It then goes on to say for self-employed individuals filing a Schedule C, the insurance plan can be in the company name or in the individuals name.

My question - What determines whether the policy is considered to be established under the business? I am self-employed, show a net profit on Schedule C and have an individual health insurance policy in my name, but there is nothing in the health policy that speaks of the business or ties it to the business. Is the fact that I am self-employed and show a net profit on Schedule C automatically make the policy "established under the business?"

If the policy is in your name and you file a Schedule C as a sole proprietor then it automatically qualifies as established under the business.


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