Starting Your Business

What are Business Expenses

Self-Employed Health Insurance Deduction

You may be able to deduct the amount paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are one of the following.

• A self-employed individual with a net profit reported on Schedule C, C-EZ, or F.
• A partner with net earnings from self-employment reported on Schedule K-1 (Form 1065).
• A shareholder owning more than 2% of the outstanding stock of an S corporation with wages from the corporation reported on Form W-2.

The insurance plan must be established under your business. You may be allowed this deduction whether you paid the premiums yourself or your partnership or S corporation paid them and you included the premium amounts in your gross income. Take the deduction as an adjustment of gross income on Form 1040.

Qualified long-term care insurance.    You can include premiums paid on a qualified long-term care insurance contract for you, your spouse, or your dependents when figuring your deduction. For more information, see the insurance chapter of Publication 535.

Important References:

Publication 535              Business Expenses