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Self Employed Health Insurance Deduction
Posted on 1/6/23 at 4:31 am
Posted on 1/6/23 at 4:31 am
Question for the tax scholars of the money board.
I'm a W2 employee with access to health insurance through my employer. My employer pays the vast majority of my premium.
My wife is self employed. She and my son have the ability to get health coverage through my employment plan, but MY EMPLOYER PAYS 0% OF THEIR PREMIUM.
My question is this: if my wife and child get a health insurance plan through the online marketplace, would those premium payments be tax deductible?
I've seen that they are not tax deductible when the spouse has access to their spouses health coverage when the employer pays a portion of the spouses premium as well.
I'm a W2 employee with access to health insurance through my employer. My employer pays the vast majority of my premium.
My wife is self employed. She and my son have the ability to get health coverage through my employment plan, but MY EMPLOYER PAYS 0% OF THEIR PREMIUM.
My question is this: if my wife and child get a health insurance plan through the online marketplace, would those premium payments be tax deductible?
I've seen that they are not tax deductible when the spouse has access to their spouses health coverage when the employer pays a portion of the spouses premium as well.
2
Posted on 1/6/23 at 4:51 am to Dayman
Theirs would be but you cannot join their plan and deduct your portion. That is my understanding anyway.
Posted on 1/6/23 at 9:09 am to Dayman
If yhe spouse is eligible for employer coverage, no deduction is allowed. The percent cost the employer pays is irrelevant.
Posted on 1/6/23 at 1:49 pm to LSUFanHouston
quote:
If yhe spouse is eligible for employer coverage, no deduction is allowed. The percent cost the employer pays is irrelevant.
I thought the wording from the IRS implies that if you have access to a spouse subsidized plan. If no premiums are paid for the spouse or dependent by the employer, wouldn't that essentially make it a non subsidized plan?
Anyway,as an aside, even if an ACA plan was deductible I'd make sure to do due diligence on the actual plan and potential cost differences. Self employed plans even through ACA marketplace can be very expensive(potentially more expensive than what you're paying for the employer premium), and many times the deductible and out of pocket max can be higher than employer sponsored plans. Lastly, in many states, ACA plans reimburse poorly and many physicians may not accept some of the ACA plans. So you may end up with a plan that could be potentially more expensive and worse access in an effort to save your marginal rate on taxes.
Posted on 1/6/23 at 2:48 pm to Puffoluffagus
quote:
I thought the wording from the IRS implies that if you have access to a spouse subsidized plan. If no premiums are paid for the spouse or dependent by the employer, wouldn't that essentially make it a non subsidized plan?
The IRS disallows the deduction if anyone is subsidized. Including the employee.
So... I guess if the employee also had no amount subsidized by employer, that would work... but if that's the case, better to get your own coverage, especially if you would qualify for a marketplace credit.
Posted on 1/6/23 at 5:41 pm to LSUFanHouston
quote:
The IRS disallows the deduction if anyone is subsidized. Including the employee.
Gotcha thanks for the clarification.
Kinda of shitty on the IRS side of things.
Posted on 1/6/23 at 10:59 pm to Puffoluffagus
quote:
Kinda of shitty on the IRS side of things.
Everything involving federal tax and health insurance is messed up
But in this case… if the employed spouse pays to cover the SE spouse… they are likely doing it via a 125 plan so they are still getting the tax deduction as the premium is paid with pre tax dollars.
Further you dont have to worry about the SE income limitation.
This post was edited on 1/6/23 at 11:03 pm
Posted on 1/7/23 at 8:13 am to LSUFanHouston
quote:
Everything involving federal tax and health insurance is messed up
OBAMA's Legacy
Posted on 1/7/23 at 10:17 pm to The Torch
quote:
OBAMA's Legacy
He took a terrible stupid situation and made it somehow worse.
But the stupidity well predates him. ACA was throwing a match on top of a garbage dump,
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