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2018 Form 1040—Schedule 1, Line 29
One of the following statements must
be true.
•
You were self-employed and had a
net profit for the year reported on
Schedule C, C-EZ, or F.
•
You were a partner with net earn-
ings from self-employment.
•
You used one of the optional
methods to figure your net earnings
from self-employment on Schedule SE.
•
You received wages in 2018 from
an S corporation in which you were a
more-than-2% shareholder. Health in-
surance premiums paid or reimbursed by
the S corporation are shown as wages on
Form W-2.
The insurance plan must be establish-
ed under your business. Your personal
services must have been a material in-
come-producing factor in the business.
If you are filing Schedule C, C-EZ, or F,
the policy can be either in your name or
in the name of the business.
If you are a partner, the policy can be
either in your name or in the name of the
partnership. You can either pay the pre-
miums yourself or your partnership can
pay them and report them as guaranteed
payments. If the policy is in your name
and you pay the premiums yourself, the
partnership must reimburse you and re-
port the premiums as guaranteed pay-
ments.
If you are a more-than-2% sharehold-
er in an S corporation, the policy can be
either in your name or in the name of the
S corporation. You can either pay the
premiums yourself or the S corporation
can pay them and report them as wages.
If the policy is in your name and you
pay the premiums yourself, the S corpo-
ration must reimburse you. You can de-
duct the premiums only if the S corpora-
tion reports the premiums paid or reim-
bursed as wages in box 1 of your Form
W-2 in 2018 and you also report the pre-
mium payments or reimbursements as
wages on Form 1040, line 1.
But if you also were eligible to par-
ticipate in any subsidized health plan
maintained by your or your spouse's em-
ployer for any month or part of a month
in 2018, amounts paid for health insur-
ance coverage for that month can't be
used to figure the deduction. Also, if
you were eligible for any month or part
of a month to participate in any subsi-
dized health plan maintained by the em-
ployer of either your dependent or your
child who was under age 27 at the end
of 2018, don’t use amounts paid for cov-
erage for that month to figure the deduc-
tion.
A qualified small employer
health reimbursement arrange-
ment (QSEHRA) is considered
to be a subsidized health plan main-
tained by an employer.
Example. If you were eligible to par-
ticipate in a subsidized health plan main-
tained by your spouse's employer from
September 30 through December 31,
you can't use amounts paid for health in-
surance coverage for September through
December to figure your deduction.
Medicare premiums you voluntarily
pay to obtain insurance in your name
that is similar to qualifying private
health insurance can be used to figure
the deduction. Amounts paid for health
insurance coverage from retirement plan
distributions that were nontaxable be-
cause you are a retired public safety of-
ficer can't be used to figure the deduc-
tion.
Self-Employed Health Insurance Deduction Worksheet—Schedule 1, Line 29
If, during 2018, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA
(ATAA) recipient, reemployment TAA (RTAA) recipient, or Pension Benefit Guaranty Corporation
pension payee, see the Instructions for Form 8885 to figure the amount to enter on line 1 of this work-
sheet.
Be sure you have read the Exceptions in the instructions for this line to see if you can use this work-
sheet instead of Pub. 535 to figure your deduction.
Before you begin:
1. Enter the total amount paid in 2018 for health insurance coverage established under your business
(or the S corporation in which you were a more-than-2% shareholder) for 2018 for you, your
spouse, and your dependents. Your insurance also can cover your child who was under age 27 at
the end of 2018, even if the child wasn't your dependent. But don’t include amounts for any month
you were eligible to participate in an employer-sponsored health plan or amounts paid from
retirement plan distributions that were nontaxable because you are a retired public safety
officer .............................................................................. 1.
2. Enter your net profit* and any other earned income** from the business under which the insurance
plan is established, minus any deductions on Schedule 1, lines 27 and 28. Don’t include
Conservation Reserve Program payments exempt from self-employment tax ................... 2.
3. Self-employed health insurance deduction. Enter the smaller of line 1 or line 2 here and on
Schedule 1, line 29. Don’t include this amount in figuring any medical expense deduction
on Schedule A ....................................................................... 3.
*If you used either optional method to figure your net earnings from self-employment, don’t enter your net profit. Instead, enter the amount
from Schedule SE, Section B, line 4b.
**Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. However, it doesn't include
capital gain income. If you were a more-than-2% shareholder in the S corporation under which the insurance plan is established, earned
income is your Medicare wages (box 5 of Form W-2) from that corporation.
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