Health insurance can be confusing. Like trying to assemble IKEA furniture without instructions. But if you are wondering whether it is tax deductible, you’re in the right place. We will break it down without the jargon or the headache.
If You Are Self-Employed
Good news if you are your own boss. If you pay for your own health insurance, you can usually deduct 100 percent of your premiums. You do not need to itemize or fill out seventeen confusing forms. Just plug the amount into your return and boom. Done.
Now, there is a catch. You can not deduct more than your business actually made. So if your business earned twenty thousand dollars and your health insurance cost twenty five thousand, you can only deduct twenty thousand.
If You Are Not Self-Employed
This is where things get a little more complicated. If you work for someone else and pay for insurance out of pocket, you would need to itemize your deductions. On top of that, your total medical expenses need to be more than seven and a half percent of your income before you can deduct anything. So unless your medical bills are stacking up like Jenga blocks, it might not be worth the effort.
If You Own a Business and Have Employees
Now we’re talking. If you offer health insurance to your employees, those premiums are tax deductible as a business expense. That means you are doing a good thing for your team and getting a tax break for it. Win win.
Here Is the Bottom Line
If you are self-employed and pay for your own insurance, there is a good shot you can write it off. If you are not, the rules are trickier. And if you’ve got employees, those costs are usually deductible too.
Not sure where you fall in all of this? That is where we come in. We will help you figure it out and make sure you are not leaving money on the table.
Taxes do not have to be terrible. Let’s make this easy. Talk to us today.
