The self employed health insurance deduction means you can save significantly when it comes to tax times.

Can I put my health insurance on a business credit card?

Yes, it’s definitely possible to put your health insurance on a business credit card. If you don’t have any savings, and need to pay for your health insurance, you can use your credit. To be honest, credit cards can be a lifeline when dealing with a big deductible. Here are some good credit cards that can help pay for a health insurance.

0 percent APR credit cards

As long as you have a good credit rating, and steady income, you can qualify for a 0% APR credit card. If you do, then you can charge the deductible and pay it off over a period of time, without any interest. For some credit cards like the Wells Fargo Platinum card, you have up to 18 months with no interest.

Is health insurance tax deductible for self-employed? 

There is a self-employed health insurance deduction. It’s a valuable write-off, but many small business owners don’t know about it.

What health expenses can I deduct?

With this deduction, you can write off a number of things, like health insurance premiums for you, your spouse, and dependents, in addition to dental care, and long term care, and even insurance plans that cover children up to 26 years old.

Can I deduct health insurance for my spouse and my kids?

Yes. Self employed health insurance deduction applies to health insurance premiums for yourself, your spouse, and your dependants. It also includes dental insurance and long term care. The insurance can cover your children up to age 27, regardless of whether they are your dependents or not.

Sole props, partners in partnerships, LLC members, and S Corp shareholders who own more than 2% of the company, can use the deduction. It only applies if you bought the health insurance policy as an individual, or if the business got it for you.

Here’s a good self-employed health insurance deduction example

  • Sole prop pays $10,000 each year for health insurance
  • The business earns $50,000 in profit each year
  • The sole prop can deduct $10,000 annual health insurance expense from his/her gross income for federal and state income tax
  • Since the sole props federal and state income tax rate is 30%, this saves the business owner $3000 in income taxes each year
  • The self employed health insurance deduction does have a significant limitation though. You can deduct, only as much as you earn, from your business.
  • If your business earns no money, or has a loss, there is no deduction
  • If you have more than one business, you cannot combine from all your businesses
  • You can only use the income from a single business you choose to be the plan sponsor

Is health insurance a business expense for self-employed individuals?

You can deduct the health insurance costs as a deductible business expense if your business chooses to pay them for employees. This doesn’t apply though if you’re the only employee in the business.

How to get around this limitation?

You can hire your spouse as your employee and provide them with health insurance for the family. The insurance can be purchased in the name of the spouse. The policy can cover your spouse, you, your children, and other dependents.

Deducting health insurance your business provides can be a business expense

If you pay for health insurance for the business, it can be a business expense. You can deduct the cost of the policy as a business expense. You can deduct it from not only your own income tax, but also from your self-employment income.

Existing credit cards

If you’re going to use a business credit card, you may not need / want to open a new business credit card. Use the existing credit card account you have, but you have to be careful with credit utilization ratio. You should never use more than 30% of your overall

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