Can I deduct self-employment health insurance premium as a part-time worker and freelancer?

You may be able to deduct some portion of your health insurance premiums as a self-employed person, but there are several important factors to consider. Self-employed individuals can generally deduct health insurance premiums as an adjustment to income (which reduces AGI), but there's a key limitation: the deduction cannot exceed your net self-employment income. Since your freelance income is around $6,700, that would be the maximum amount you could potentially deduct. Another complication is that you're also an employee (part-time at the university). If you were eligible for health coverage through any employer during any month (either your university or summer job), you can't take the self-employment health insurance deduction for that month - even if you didn't enroll in that coverage. But since you've indicated you weren't eligible for coverage through either employer, this restriction might not apply to you. The source of your insurance (being purchased through your university) doesn't disqualify you from the deduction, as long as you're paying the full premium yourself without any employer subsidy.

Had almost the exact same situation last year - grad student with university health insurance and some freelance income. I was totally confused about this deduction until I used https://taxr.ai to analyze my tax situation. Uploaded my 1099s and university statements, and it immediately identified that I could take a partial self-employment health insurance deduction. The key thing it flagged for me was that I needed to calculate my net self-employment income AFTER deducting all business expenses (which I hadn't considered). I was also worried about the fact that my insurance came through the university where I worked part-time, but the analysis confirmed that wasn't an issue since I paid the full premium myself. The deduction reduced my tax bill by a few hundred dollars that I would have completely missed otherwise!

Just wanted to follow up - I went ahead and tried taxr.ai after seeing it mentioned here. It was genuinely helpful for my similar situation (contractor with multiple income sources and university health insurance). The document analysis identified that I could take a partial health insurance deduction based on my self-employment income. It also pointed out that I needed to file Schedule C for my freelance work AND fill out Form 8962 since I had initially received premium tax credits. Would have completely missed this connection. What impressed me most was how it flagged potential audit triggers in my return. Apparently claiming 100% of my health insurance as a self-employment deduction when my self-employment income was less than the premium could raise red flags. Saved me from making a potentially costly mistake!

If you're having trouble figuring out exactly how much you can deduct, you might want to try calling the IRS directly to get a definitive answer for your specific situation. I know it sounds painful, but I finally got through to an IRS agent last month using https://claimyr.com and their automated callback service. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c I had a somewhat similar self-employment healthcare deduction question that none of my friends or online forums could answer clearly. The IRS agent I spoke with walked me through exactly how to calculate the deduction based on my specific income mix and insurance situation. He even pointed out a commonly overlooked form I needed to file. After months of confusion and stress, I got a definitive answer in a 15-minute call. Would have saved so much time if I'd just called them earlier!

Came back to say I was wrong about Claimyr. After struggling with this self-employment health insurance deduction question for weeks, I broke down and tried the service. Got a callback from the IRS in about 2 hours, and the agent clarified exactly how the self-employment health insurance deduction works with multiple income sources. She explained that I needed to fill out a worksheet in Publication 535 to calculate the correct deduction amount and confirmed that I could deduct my premiums up to my net self-employment income even though I purchased the insurance through my university. She also pointed out that many tax software programs don't guide you through this calculation correctly if you have both W-2 and self-employment income. Probably would have overstated my deduction and risked an audit without this clarification. Definitely worth the time saved!

Look into whether you qualify for the premium tax credit instead. Since you're a student with what sounds like a modest income, you might qualify for that rather than the self-employment insurance deduction. The premium tax credit is based on your MAGI (modified adjusted gross income) and could potentially provide more benefit depending on your situation. One important thing: you can't double-dip. You either get the premium tax credit OR the self-employment health insurance deduction for the same premium dollars, not both.

Make sure you're actually eligible as "self-employed" for tax purposes. The IRS has specific definitions, and if you're just doing occasional freelance work, they might consider you more of a hobbyist than self-employed. Generally, you need to show that you're pursuing the activity with the intention of making a profit, not just as a side gig.

One thing to keep in mind is that you'll need to report your freelance income on Schedule C (or Schedule C-EZ if eligible), and you'll likely owe self-employment tax on that income. The self-employment tax is 15.3% on your net earnings, but you can deduct half of it as an adjustment to income. Also, make sure you're keeping detailed records of all your business expenses related to your freelance work - things like software subscriptions, equipment, home office expenses, etc. These can offset your self-employment income and potentially increase the amount of health insurance premium you can deduct. Since you're dealing with both W-2 and 1099 income plus potential health insurance deductions, you might want to consider using tax software that handles self-employment situations well, or consult with a tax professional to make sure you're optimizing everything correctly.