Is COBRA health insurance (from 1095-B) not eligible for tax deduction?

The good news is that health insurance premiums, including COBRA, can potentially be deductible - but it depends on your specific situation and how you file. If you're self-employed, you might be able to deduct your health insurance premiums (including COBRA) as an adjustment to income on Schedule 1 of Form 1040. This is called the self-employed health insurance deduction, and it's available even if you don't itemize deductions. If you're not self-employed, health insurance premiums can only be deducted as itemized medical expenses on Schedule A, and only the amount that exceeds 7.5% of your adjusted gross income. This makes it harder to benefit from. Regarding self-employment tax, make sure you're tracking all legitimate business expenses on Schedule C to reduce your net profit, which is what self-employment tax is calculated on. Also, only pay self-employment tax on actual business income - if you received unemployment or other non-business income, that's not subject to self-employment tax.

After struggling with almost this exact situation, I discovered taxr.ai (https://taxr.ai) and it was a game-changer for understanding my health insurance deduction options. I was also on COBRA after being laid off and doing some freelance work, and was totally confused about what I could deduct. I uploaded my 1095-B and premium payment statements, and the system walked me through exactly how the self-employed health insurance deduction works with COBRA payments. It showed me which forms to use and how to properly document everything to maximize my deduction. The best part was it also identified several legitimate business expenses I hadn't even thought to deduct, which helped lower my self-employment tax quite a bit.

Just wanted to follow up - I decided to try taxr.ai after seeing the recommendation here. I was honestly surprised by how helpful it was! I uploaded my COBRA statements and 1095-B, and it immediately clarified that I could take the self-employed health insurance deduction since I had some freelance income. The system showed me exactly where to report this on my tax forms and explained how much of my premiums would be deductible based on my self-employment income. It also flagged that I needed to reduce my deduction because I received premium tax credits for part of the year (something I hadn't even realized). Ended up saving about $1,400 in taxes that I would have missed otherwise!

If you're having trouble getting clear answers about your COBRA deductions or self-employment taxes, trying to reach the IRS directly might help, but it's nearly impossible to get through. After waiting on hold for hours multiple times, I found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in under 15 minutes. I explained my COBRA situation and got definitive answers about how to handle the deduction with my mixed income sources. The agent walked me through exactly how to document everything properly to avoid potential audit flags. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Honestly, getting those answers directly from the IRS gave me peace of mind that I wasn't missing anything or making a mistake that would come back to haunt me later.

I need to eat my words here. After being super skeptical about Claimyr, I decided to try it because I was desperate for answers about my COBRA premium deductions. I was shocked when I got connected to an IRS representative in about 12 minutes. The agent confirmed that my COBRA premiums could be deducted as self-employed health insurance (since I had some 1099 income), but only up to the amount of my self-employment income. She also explained that I had been calculating my self-employment tax incorrectly - I didn't realize I could take the employer-equivalent portion as a deduction. Instead of spending hours on hold or guessing about the rules, I got clear, official answers in minutes. Definitely worth it when you need definitive information directly from the IRS.

Something important to mention about COBRA and taxes: if you were on COBRA but also received any Advanced Premium Tax Credit during part of the year for Marketplace insurance, you need to be careful about how you report everything. I made the mistake of double-dipping by claiming both the premium tax credit AND trying to deduct the full amount of my insurance payments. Ended up with a letter from the IRS and had to pay back some of my refund plus interest.

Has anyone here used the QSE HRA (Qualified Small Employer Health Reimbursement Arrangement) option instead of COBRA? When I got laid off I started my own single-person LLC and set this up. It lets you reimburse yourself tax-free for health insurance premiums up to certain limits. Might be something to look into if you're self-employed now!

I went through a very similar situation last year - laid off and maintaining COBRA while doing freelance work. The key thing I learned is that the self-employed health insurance deduction can be a real lifesaver, but there are some important limitations to be aware of. First, you can only deduct up to the amount of your self-employment income. So if you paid $8,000 in COBRA premiums but only made $5,000 in freelance income, you can only deduct $5,000. Second, you cannot take this deduction for any months you were eligible for employer-sponsored coverage elsewhere (including a spouse's plan). This caught me off guard initially. For reducing self-employment tax, make sure you're tracking every legitimate business expense - office supplies, software subscriptions, business meals, mileage for client meetings, etc. Also remember that you can deduct half of your self-employment tax as an adjustment to income, which helps reduce your overall tax burden. One thing that really helped me was keeping detailed records throughout the year rather than trying to reconstruct everything at tax time. Save all your COBRA payment confirmations and any business-related receipts.