Self Employed Health Insurance Deduction S Corporation, How An S Corporation Reduces Fica Self Employment Taxes

This includes dental and long term care coverage.

Government finance statistics yearbook 2018 pdf. Publication 554 page 2. Self employed owners are able to deduct health insurance premiums for themselves and their dependents. Click through until you have the option to update or add your k 1.

Sign into your turbotax account. When youre an s corporation owner with more than 2 of the company stock youre treated the same as a self employed person when it comes to deducting health insurance. S corp owners may not have the same access to tax free health insurance as non owner employees but they can still ensure their premiums are tax advantaged.

The internal revenue service has defined a 2 shareholder as a person who owns on any day during the tax year more than 2 percent of outstanding stock of an s corporation. Type k 1click jump to k 1. Under irc 1372 individuals holding 2 or more of the stock of an s corporation are treated as.

Click search in the upper right hand corner of your screen. If youve already entered your k 1 click edit if you havent then click add. Even though an s corporation shareholder is not technically self employed the irs requires a more than 2 percent s corporation shareholder to report the deduction as.

In chief counsel advice 201912001 the irs held that family members who while not directly holding shares in an s corporation are deemed to be 2 shareholders under the rules of 318 are allowed to claim the self employed health insurance deduction under irc 162l if they otherwise qualify. The self employed health insurance deduction applies to health insurance premiums for yourself your spouse and your dependents. A 2 percent shareholder employee is eligible for an above the line deduction in arriving at adjusted gross income agi for amounts paid during the year for medical care premiums if the medical care coverage was established by the s corporation and the shareholder met the other self employed medical insurance deduction requirements.

Self employed people are allowed to deduct health insurance premiums including dental and long term care coverage for themselves their spouses and their dependents. Notice 2008 1 contains the rules and examples for deducting accident and health insurance premiums by a more than 2 shareholderemployee of an s corporation. Deducting s corporation health insurance premiums notice 2008 1.

Deducting health insurance premiums if youre self employed accessed dec. To enter health insurance premiums you paid as a self employed s corporation member. Click continue if prompted to do so.

This insurance can also cover your children up to age 27 26 or younger as of the end of a tax year whether they are your dependents or not. Self employed individuals calculating your own retirement plan contribution and deduction accessed dec. Specifically s corp owners can take a personal income tax deduction on the health insurance premiums paid by the business.