How to Deduct Medical Expenses for the Self-Employed
Anyone who itemizes their tax deductions can claim qualifying medical expenses that exceed 7.5 percent of their adjusted gross income. If you are self-employed and have no access to an employer-sponsored medical insurance plan, you can deduct your medical insurance premiums even without itemizing your deductions. These medical premiums also include those for your spouse and dependents. Knowing how to claim the various deductions allows you to lower your income taxes without exposing yourself to interest and penalties for incorrectly reporting your expenses.
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Instructions
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Report the amount of medical insurance premiums paid during the year on line 28 of your Form 1040 income tax return. You can claim this deduction without itemizing your deductions, but you cannot count the medical premiums towards the medical and dental expenses deduction because then you would be claiming the same expense twice.
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Report the total amount of your medical expenses not including your self-employed premiums on line 1 of Schedule A.
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3
Copy your adjusted gross income from line 38 of your Form 1040 tax on line 2 of your Schedule A.
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4
Multiply your adjusted gross income by 0.075 and report the result on line 3 of Schedule A. For example, if your adjusted gross income equals $44,600, multiply $44.600 by 0.075 to get $3,345.
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Subtract the amount on line 3 from your medical and dental expenses on line 1 to find the value of your medical and dental deduction and report it on line 4. This amount will be subtracted from your adjusted gross income with your other itemized deductions.
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