Self-Employed Insurance Deduction: New IRS Form 7206, and Medical Reimbursement Plans

The self-employed health insurance adjustment continues to be one of the most lucrative deductions for self-employed taxpayers. Besides lowering taxable income, it is reported as a reduction to AGI (adjusted gross income), often allowing taxpayers to benefit from other tax offerings that are subject to AGI limitations. Despite being such a popular deduction, many misconceptions surround self-employed health insurance. And the reach of the expenses that qualify is much broader than many tax practitioners realize.

In addition to taxpayers who report their income on Schedule C, certain S corporation shareholders, partners, and even Schedule F filers can qualify for the deduction. For 2023, the IRS added Form 7206, Self-Employed Health Insurance Deduction, to determine and report the deduction. The instructions clarify that long-term care premiums can qualify as self-employed health insurance. Tax practitioners working with self-employed taxpayers and flow-through entities need to understand the far reach of this deduction and the relative guidelines.

Listen as Larry Pon, CPA/PFS, CFP, EA, USTCP, AEP at Pon & Associates, reveals how to reap the benefits of as well as report the self-employed health insurance deduction.

1. Self-employed health insurance: introduction
2. Eligibility
   • Self-employed
   • S corporation shareholders
   • Partners
3. Health insurance premiums
4. Long-term care
5. Medicare
6. Spousal premiums
7. Medical reimbursement plans
8. Preparing Form 7206
9. Reporting the adjustment
   • Self-employed taxpayers
   • S corporation shareholders
   • Partners
10. 10. Other considerations

The panelist will review these and other critical issues:

• Completing IRS Form 7206, Self-Employed Health Insurance Deduction
• Coupling self-employed insurance with a medical reimbursement plan
• Reporting the self-employed insurance deductions for self-employed taxpayers and flow-through entity owners
• Which plans and expenses qualify for the self-employed insurance deduction

Learning Objectives

After completing this course, you will be able to:

• Identify plans that qualify for the self-employed health insurance deduction
• Determine which taxpayers qualify for the self-employed health insurance deduction
• Decide how to implement a medical reimbursement plan for self-employed taxpayers
• Ascertain which expenses qualify for the deduction that are often overlooked

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).