Can I deduct ACA insurance premiums on my taxes as a self-employed contractor?

Yes, you can deduct your ACA premiums as a self-employed contractor! The language in the instructions is a bit confusing, but here's the good news - when it says "the policy can be either in your name or in the name of the business" for Schedule C filers, that's exactly your situation. The key part is that you're filing Schedule C and the policy is in your name, which meets the requirements. The phrase "established under your business" doesn't mean the plan needs to be in your business name - it just means the coverage needs to be connected to your self-employment activity. There's one important qualification though: you can only deduct premiums up to the amount of your net profit from self-employment. So if your business has a loss for the year, you won't be able to take the deduction. Also, you can't deduct premiums for any month you were eligible for coverage through your spouse's employer plan, if applicable.

I went through this exact same confusion last year! I spent hours researching and getting different answers until I found taxr.ai (https://taxr.ai) which analyzed my 1095-A and other tax docs and confirmed I could deduct my ACA premiums as a self-employed person. The tool explained that as a Schedule C filer, having the policy in your personal name is completely fine. It also helped me understand how the deduction interacts with premium tax credits, which was another confusing aspect I hadn't even considered. What I liked most was that it showed me exactly where to report everything on my tax forms so I didn't miss anything. Saved me a ton of stress since I was convinced I was interpreting the rules wrong!

Just wanted to follow up and say I tried taxr.ai after seeing it mentioned here. Not only did it confirm I could deduct my ACA premiums, but it caught something I totally missed! Turns out I was calculating my deduction wrong because I didn't realize I needed to subtract the premium tax credit amount first. The explanation made so much sense - you can only deduct what you actually paid out of pocket, not the total premium. It saved me from potentially making a mistake that could have triggered an audit. The tax code language is so confusing, but having something break it down specifically for my situation made all the difference.

I had a similar issue and couldn't get a straight answer from anyone. After waiting on hold with the IRS for literally hours over multiple days and never getting through, I used Claimyr (https://claimyr.com) and got connected to an IRS agent in about 20 minutes. The agent confirmed that as a Schedule C filer, I could deduct my ACA premiums even though the policy was in my personal name. They explained that sole proprietors are considered the same entity as their business for tax purposes. You can see how their service works here: https://youtu.be/_kiP6q8DX5c This saved me days of frustration and conflicting Google searches. The agent was actually really helpful and gave me references to the specific IRS publications that covered my situation.

I have to admit I was wrong about Claimyr. After my skeptical comment, I decided to try it because I was getting nowhere with my 1099-K question and couldn't find consistent answers online. The service connected me to an IRS representative in about 15 minutes after I'd previously spent 3+ hours on hold over multiple days. The agent clarified my self-employed health insurance deduction questions too while I had them on the phone. They confirmed that having an ACA plan in your personal name is fine for Schedule C filers because sole proprietorships and the individual are considered the same tax entity. The time saved was definitely worth it, and I got an official answer directly from the IRS instead of conflicting online opinions.

Make sure you're tracking your premium payments carefully! I got audited last year because I deducted the full premium amount on my Schedule C when I should have only deducted what I actually paid (after the premium tax credit). Big difference! Also, keep in mind this deduction goes on Schedule 1, not Schedule C. I made that mistake my first year self-employed and had to file an amended return.

Has anyone run into issues with the IRS questioning this deduction? I deducted my ACA premiums last year and got a letter requesting more information about my "business insurance plan." I'm worried they don't consider an individual ACA plan valid for self-employed people.

I went through this exact situation last year and can confirm you're good to go! As a Schedule C filer with an ACA plan in your personal name, you absolutely qualify for the self-employed health insurance deduction. The key thing to remember is that you can only deduct what you actually paid out of pocket - so if you received advance premium tax credits, you need to subtract those from your total premiums before claiming the deduction. Your 1095-A form will show both the total premium and any APTC you received. Also make sure your deduction doesn't exceed your net profit from self-employment for the year. If your business shows a loss, you won't be able to claim any of the deduction. One more tip - keep excellent records of your premium payments and your 1095-A. The IRS sometimes requests documentation for this deduction, and having everything organized will save you headaches if they ask questions later.