[Anonymous]

reviewing Becker it appears that if self-employed health insurance premiums are an adjustment before AGI, but if not self employed are an itemized deduction. Is this correct and why?

Also are health insurance premiums and medical insurance premiums the same thing because both are used in the study materials.

[Wendy]

Yes, I believe you are correct. The reason is that when your Self Employed your Health Insurance Premiums are considerably higher because your covering both the employee and employer share. Additionally your Gross Income from your business is higher since your health insurance is not deducted as an expense. Therefore, since your insurance premiums are not deductible on Schedule C, they are allowed as an adjustment for AGI.

If your a plain old employee, it is deductible from AGI subject to the 10% under 65. The reasoning to me is because it wasn't included in your gross income and therefore the IRS doesn't want to cut you as much of a break on it.

Does that make sense??

Wendy

Hopeful this time around.... Back after a 2 year break!!

BEC - Feb 2013 78!!
FAR - May 2013 76!!
REG - 70! 71! 80!!
AUD - Oct 2013 79!!

FINALLY DONE!!

[Wendy]

Yes, I believe you are correct. The reason is that when your Self Employed your Health Insurance Premiums are considerably higher because your covering both the employee and employer share. Additionally your Gross Income from your business is higher since your health insurance is not deducted as an expense. Therefore, since your insurance premiums are not deductible on Schedule C, they are allowed as an adjustment for AGI.

If your a plain old employee, it is deductible from AGI subject to the 10% under 65. The reasoning to me is because it wasn't included in your gross income and therefore the IRS doesn't want to cut you as much of a break on it.

Does that make sense??

Wendy

Hopeful this time around.... Back after a 2 year break!!

BEC - Feb 2013 78!!
FAR - May 2013 76!!
REG - 70! 71! 80!!
AUD - Oct 2013 79!!

FINALLY DONE!!

[n.ACMA]

Self-Employed Health Insurance (100% deductible)

Self-employed individuals may deduct all of the medical insurance premiums paid for the

taxpayer, spouse, and dependents, provided that the plan is set up in the name of the

self-employed individual or the individual's business. Premiums paid for self-employed

health insurance reduce the base for the calculation of Social Security/Medicare tax paid in

connection with self-employment income.

[n.ACMA]

Self-Employed Health Insurance (100% deductible)

Self-employed individuals may deduct all of the medical insurance premiums paid for the

taxpayer, spouse, and dependents, provided that the plan is set up in the name of the

self-employed individual or the individual's business. Premiums paid for self-employed

health insurance reduce the base for the calculation of Social Security/Medicare tax paid in

connection with self-employment income.

[n.ACMA]

Types of Deductible Medical Expenses (itemized deductions)

(1) Medical and accident insurance (including qualified long-term care

premiums, although the deduction is limited based on the age of the

taxpayer)

[n.ACMA]

Types of Deductible Medical Expenses (itemized deductions)

(1) Medical and accident insurance (including qualified long-term care

premiums, although the deduction is limited based on the age of the

taxpayer)

[Author]

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