How should I handle the health care deduction for my busienss

Much has been made about the Affordable Care Act and how it may continue to affect how small businesses offer health insurance to their employees. However, some small business owners may be missing out on tax deductions that they can claim for paying insurance premiums through their business. This may be especially important for self-employed individuals.

This post will provide some helpful information on whether premiums should be paid through the business.

Essentially, if you have net profits that you can report on your Schedule C that accompanies your tax return, you are eligible to deduct health insurance premiums you paid through the business. Allowable health insurance deductions include monthly medical and dental premiums for yourself as well as your spouse and any children under your plan. The deduction may end up reducing your taxable income, which could then affect how much you owe in taxes.

However, if you are reporting a loss through your business, the deduction will have to be claimed on your Schedule A, where you will have to list it as an itemized deduction. You may be subject to a cap on how much you may claim as a deduction depending on if you are of retirement age. Again, the premiums paid could result in your taxable income being affected, which could change how much you owe, or result in a refund.

Nevertheless, the question is an example of why it is good to have a relationship with an experienced business law attorney who is knowledgeable with tax compliance. If you have questions or need guidance, feel free to contact us. 

No Comments

Leave a comment
Comment Information
Email Us For A Response

Tell us about your legal matter

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

The Jin Law Group
200 Park Avenue
Suite 1700
New York, NY 10166

Phone: 646-863-9110
Fax: 646-862-9620
Map & Directions

Rated by Super Lawyers Ruth Jin Rated by Super Lawyers G.Oliver Koppell ABA Defending Liberty Pursuing Justice Institute of International Economic Law New York City Bar NYSBA New York's Women Leaders in the 2016 Law Lawyers of Distinction corporateINTL global award winner 2017