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andrewboucherconsulting
Level 1

(QBSE) Health Insurance Premium deduction - can someone help me understand how it works?

Hi everyone,

 

Background: First time Self-Employed person here. I have a business checking account and credit card for all business transactions. I pay my health insurance premiums myself out of a personal account, with no contribution from my business.

 

Problem: I understand that I can deduct my premiums if I pay them myself, and that the Health Profile will determine if I'm eligible or not. Once I've filled that out, though, how do I think about entering the transactions themselves and how they affect my books and analytics?

 

I'm paying for them out of pocket with my personal bank account, so it feels like a Personal expense. Entering them as a Personal expense, though, doesn't aggregate the payments in the Taxes page. Entering it as a Business expense aggregates it as a deduction under Taxes, so I gather that that that's the correct way to do it, but it's a bit confusing because it then shows as business spend on my Home page and Transactions page (and affects my All Spending and All Profit categories at the top of the Transactions page), but doesn't register as an expense on my P&L.

 

Questions: It's not being paid for by the business, it doesn't seem right for it to show up as business spend on my Transactions page, so will this be reported correctly to the IRS if it's in here as a business expense but paid for out of my personal accounts? How do I ensure that I'm analyzing my business correctly I relation to these? What is QBSE doing with these transactions, and how can I better think about this conceptually? 

 

How does this feature actually work in full-scope from start to finish and how can I nail the concept down in my head?

1 Comment 1
Rasa-LilaM
QuickBooks Team

(QBSE) Health Insurance Premium deduction - can someone help me understand how it works?

Hi there, andrewboucherconsulting.


Thanks for visiting the Community today. Let me share some insights of how QBSE handles your health insurance premiums.


QuickBooks Self-Employed treats medical premiums as personal expenses. They’re not included in our calculations for estimated taxes or business expenses. That said, the transactions will not show in the Profit and Loss Report.


Once you fill out the Health Profile, you may be eligible to deduct some, all, or one of the expenses. The following healthcare deductions affect your quarterly tax estimates.

 

  • Health Insurance Premiums, including dental and vision premiums
  • Health Savings Account (HSA) contributions

Aside from that, we help determine if you can write off your health care expenses as a deduction. Let me share this article for more details: Find out if your healthcare is deductible in QuickBooks Self-Employed


The data displayed on the Home or Transactions page depends on how entries are categorized in QBSE. Also, only the Schedule C categories would display on the Profit and Loss report. Click on this link to view the complete list.


For additional resources, check out the following articles:

 

Don’t hesitate to leave a comment below if you have any clarifications. I’ll be around to answer them for you. Enjoy your day. 

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