I am a sole proprietor. Can I write off my medical insurance premiums?

If you pay medical insurance premiums to cover your employees, you can deduct that amount as an ordinary business expense right on your Schedule C.

However, the premiums you pay for you and your family get special tax treatment. Deduct a portion of these premiums right on your Form 1040, and deduct the balance on Schedule A as an itemized deduction.

Special break for you and your family

If you meet the requirements, you can deduct up to the following percentages of your medical insurance premiums, right on the first page of your Form 1040, whether or not you itemize your deductions:

If you were self-employed, you may claim a special deduction on Form 1040, Schedule 1, for 100% of health insurance premiums you paid for yourself, spouse and your dependants. This deduction is also allowed if you received wages from a S corporation in which you were more than a 2% shareholder, you were a general partner, or were a limited partner who received guaranteed payments.

Deduct the rest of the cost on Schedule A, just as non-self-employed individuals do.

To deduct a percentage of your premiums on your Form 1040, you must meet the following requirements:

• You have sufficient net income from your self-employment business, and
  
• Neither you nor your spouse have medical insurance through your employment with someone else.