Are health insurance premiums and medical bills tax-deductible?
December 15th, 2009 by admin
I am self-employed and paid my own health insurance. Also, I had other medical bills not covered by my insurance company. Are either (health premiums or medical bills) tax-deductible?
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If the health insurance is “through your business” you can deduct it on the front of your 1040.
The remaining medical expenses go on schedule A–only useful if they exceed 7.5% of your income and you already itemize….
Health insurance premiums are a legitimate company expense, unless you are an “S” corporation, as per IRS section 125. See link below. If you are an S Corp. the premiums get added back into your income “above the line” on your 1040. If you have employees it is a good idea to open up a Sec. 125 plan, also known as a “cafeteria plan” because it allows pre-tax deductions for insurance premiums, saving both your company and your employees payroll taxes.
Medical bills that exceed %7 of your income are deductible.
Don
If you are self employed, you should have an arrangement set up so that the business pays all your insurance, plus any medical bills not paid by your insurance. They all become tax deductible. You are much better off being a LLC, and not a sole proprietorship to do this.
Make sure that all the bill are only paid from a business checking account. Plus, you can get a business credit card to pay the doctor bills, pharmacy bills, etc.