Did you know that if you pay for your own health insurance, you’re probably qualified for a tax deduction?
If you’re self-employed and pay for medical, dental, or long term care insurance premiums for yourself, a spouse, or dependents, you may be able to deduct 100% of the cost of those premiums, given you fit the following two criteria:
1. You made a profit this year through self-employment.
The deduction cannot exceed the net profit you made from being self-employed. So if you lost income this year through your business, you won’t qualify for the deduction.
2. You have no other form of health insurance.
If you are eligible for health insurance from an employer or a spouse’s employer, even if you choose not to enroll in it, you won’t qualify. The deduction is only for folks who have no other options for health insurance and must purchase it themselves.
The health insurance write-off is on page one of form 1040. You’ll benefit whether or not you itemize your deductions.
Don’t miss out on this important tax deduction! It’s probably one of the largest you can take, and it can make a big difference in your taxes. And of course if you don't have insurance yet, get it before the end of open enrollment on February 15!
To figure out the nitty-gritty and check if you’ll qualify, read about the health insurance deduction for self-employed folks at IRS.gov.
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Larissa Pham is an artist and writer based in Brooklyn, New York. She is trying to overcome her fear of filing taxes.