How Do You Deduct Self Employed Health Insurance Premiums When Both Are Self Employed?
The Internal Revenue Service (IRS) provides guidance for the deduction of health insurance premiums for self-employed taxpayers with more than one source of self-employment income in IRS Publication 535, Business Expenses. If two self-employed married taxpayers each have only one source of self-employment income, then the worksheet for calculating the deduction found in the instructions for Form 1040 can be used. Calculating the deduction correctly requires attention to detail. Calculate the total premiums you and your spouse paid for health insurance. Do not include any premiums paid while in the employ of others. Enter this amount on Line 1 of worksheet 6-A. Determine your net income from self employment, for the business under which the insurance is established, and enter on Line 4 of Worksheet 6-A. Do not deduct health insurance premiums in calculating net income from self employment. Determine the net profit from all of your self employment. Do not add in any businesses for which
