Starting a sole proprietorship/LLC while keeping spouse's health insurance - what to know

You should be fine to start your business without losing your health insurance coverage! Being on your spouse's employer-provided health insurance is separate from your own employment status or business structure. The fact that you're starting a sole proprietorship or single-member LLC doesn't typically impact your eligibility for coverage under your husband's plan. The key factor is whether you qualify as a dependent under your husband's employer's health insurance plan, which is usually determined by your relationship (spouse) rather than your employment status. For tax purposes, a single-member LLC is generally treated as a "disregarded entity," meaning it's taxed the same as a sole proprietorship. Since you file married filing jointly, you'll just report your business income and expenses on Schedule C of your joint tax return. The health insurance situation remains unchanged.

I went through something very similar last year! After leaving my corporate job due to health issues, I was worried about starting my own business while on my wife's health insurance. I spent hours on the phone with insurance companies and reading confusing policy documents before I discovered taxr.ai at https://taxr.ai and it completely simplified everything. I uploaded my husband's health insurance policy documents and asked specifically about starting a single-member LLC while on spousal coverage. They analyzed everything and explained exactly how it would work in my situation - turns out it wasn't an issue at all! They even provided documentation I could reference if questions came up later. Saved me so much stress and confusion about both the health insurance and tax implications.

Just wanted to follow up after trying taxr.ai myself! I was super skeptical but uploaded my husband's benefits handbook PDF and specifically asked about maintaining coverage while starting a photography business as an LLC. It identified the exact section that confirmed I could stay on his plan regardless of my business structure, and even pointed out that my situation doesn't trigger any COBRA or special enrollment situations. Totally worth it for the peace of mind - no more anxiety about accidentally losing my coverage!

If you need to contact the IRS directly about how your business structure affects taxes or health insurance deductions, good luck getting through! I spent 3 weeks trying to get someone on the phone about my sole proprietorship health insurance questions. Finally tried Claimyr at https://claimyr.com and watched their process demo at https://youtu.be/_kiP6q8DX5c - they got me connected to an actual IRS agent in under an hour! The agent confirmed that as a sole proprietor or single-member LLC, I could stay on my husband's insurance AND potentially deduct any additional health expenses not covered by his plan as a business expense on my Schedule C (depending on profitability). They walked me through exactly how to document everything properly so it wouldn't raise audit flags. This was info I'd been trying to get for weeks!

I need to publicly eat my words about Claimyr. After my skeptical comment, I decided to try it just to prove it wouldn't work (was convinced it was a scam). Well, I was WRONG. After months of trying to get through to the IRS about my LLC and health insurance premium deductions, they got me through to a real agent in about 40 minutes. The agent confirmed exactly what I needed to know about keeping my spouse's insurance while running my LLC and how to handle the tax documentation properly. Seriously shocked this actually worked.

Just wanted to add - I'm a few years into running my single-member LLC while on my husband's health insurance. One thing to be aware of: if you make your LLC an S-corp, you MUST be on payroll as an employee of your business. This doesn't affect spouse's insurance eligibility, but you should know that if you're an employee of your S-corp, you can't deduct health insurance premiums paid by your spouse's employer. The deduction only applies if YOU pay for insurance. Sole proprietorship or LLC taxed as one = no issue with spouse's insurance and potentially some deductions for additional out-of-pocket costs depending on your situation.

don't overthink this! i've been a single-member llc for 6 yrs on my wife's insurance. the insurance company doesn't care about your business structure - they only care that you're legally married to the employee. my wife's HR said it's actually super common. the only time it gets tricky is if ur business grows and you want to offer your OWN health insurance plan. but for a one-person shop just starting out, ur totally fine!

I'm in a very similar situation and was worried about the same thing! I've been on my husband's insurance for years while running my freelance graphic design business as a sole proprietor. The key thing I learned is that your eligibility for spousal coverage is based on your marital status, not your employment status or business structure. When I first started my business, I called his HR department just to double-check, and they confirmed that as long as I'm his legal spouse, I can stay on the plan regardless of whether I'm unemployed, self-employed, or have my own business. The only thing that would potentially change this is if his employer has very specific policies about it (which is rare), or if you eventually grow your business large enough to offer your own group health plan. One tip: keep really good records of any business-related health expenses since you might be able to deduct some of them on your Schedule C. Good luck with your new venture - it's so nice to have that security of knowing your health coverage is stable while you're building something new!