There are many reasons why being self-employed isn’t for everyone, not the least of which is that you’re responsible for buying your own health insurance. However, most likely you can deduct health insurance premiums paid from your taxable income on your 2024 tax return.
NO COVERAGE ELSEWHERE
You need to meet two major requirements to qualify for this tax break.
First, you and your spouse cannot be eligible for an employer- sponsored health insurance benefit.
Second, you must have enough business income to qualify. You can take a partial deduction if you don’t have enough. For example, you can only deduct $10,000 from a $15,000 health insurance policy if your income is $10,000. If your income is greater than the cost of insurance, deduct the entire premium.
ITEMIZE OR NOT
You don’t have to itemize this on your tax return, meaning you may also want to take the standard deduction if you only have a few other deductions.
The health insurance deduction, unlike many others, is considered “above the line,” meaning it is deducted from your gross income and lowers your eventual adjusted gross income.
The latter category often determines your availability for other tax breaks, including deductible IRAs.