[RickJ]

I have 3 income sources:
1. Salaried Job w-2 income
2. Schedule E Rental Properties.
3. Schedule C Sole Proprietorship.

I pay for my family's health insurance out of the Sole Proprietorship.

Medical expenses over and above that get figured into my schedule A and I always fall short of the minimum, to be able to write any of it off...

So since I pay for the health insurance out of the Sole Proprietorship Income, can I write off the Insurance payments out of there?

Thanks!

[de_de_gc]

You can deduct 100% of your health insurance from gross income, provided:

1. The premiums on the health insurance cannot exceed your net income FROM YOUR SCHEDULE C ENTITY.
2. At no time during any month or part of the month were you eligible to participate in a health insurance plan provided by your (W-2)employer. -Any month or part of the month you were eligible, that premium would not be deductable as SE Health Insurance.

[RickJ]

Thank you, de_ !

[RickJ]

Someone locally told me that the sole proprietorship (SP) needs to be a Corp or LLC to write off the Health Insurance.

To clarify: My SP is simply a registered (with my State) trade name.

I do NOT get anything from my w-2 employer for health insurance or medical expenses.

I use the SP income to pay for the Health Insurance, which is for my whole family.

Still OK to just write it off (from the SP income) as an expense?

... and would I still continue to put additional medical expenses on the Schedule A Itemized Deductions?

Thanks so much!

[de_de_gc]

Good follow-up question.

You do not have to have an LLC or S-Corp, sole proprietorships are absolutely entitled to this deduction/adjustment.
The balance of the amount that is not an adjustment to your AGI goes on schedule A and is deductible to the extent that your total medical expenses exceed 7.5% of your AGI.

[AtlantaTaxExpert]

DeDeGC's answers are totally accurate.

You CAN and should deduct the health insurance premiums off your Schedule C with the restrictions noted.

[RickJ]

Thank you both!

[de_de_gc]

Glad to help!

[AtlantaTaxExpert]

Glad to help!

[lightwalkersvcs]

Glad to help!

Hello,

I am in a similar situation. I may be separating from my W-2 employer but already have a QuickBooks/Consulting business which is a SP. I will then be paying for my own insurance for myself and my son. Does the insurance policy have to be in the name of the business to be deductible? I am unable to get insurance in the company name because I am the only employee.'

Thanks in advance for your help!!

[AtlantaTaxExpert]

As a sole proprietor, you ARE the LLC, so the insurance policy can be in your name and still be deductible.