Dental insurance tax deductible for sole proprietor?

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Topic Author
Infomom2
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Joined: Sun Feb 14, 2016 3:25 pm

Dental insurance tax deductible for sole proprietor?

Post by Infomom2 »

So, 2020 is first year having my own business. I am eligible for health insurance through the marketplace and for 2020 chose to also purchase dental insurance. I read through the past threads and know its hard to know if dental insurance is worth it, there are discount plans, etc. My dental insurance is costing my $40/mo and does cover my particular dentist. My dentist also works with a discount plan called AVS.

My question: If I qualify for tax deduction for my health care (medical insurance) premium, will I qualify for the deduction for a dental premium? I was hoping to know that by the time I had to renew the dental insurance for 2020, but I have not been able to find an accountant to just talk to me. They all say, contact me at tax time (I think I am pretty much small potatoes in terms of my needs/how much I would owe them compared to larger businesses). The reason I chose to go with the $40/mo plan for 2020 was that I hoped it would be tax deductible, but I don't know if that is true so am torn about if I should continue it or switch to a discount plan for 2021.

Also, not a tax question, but does anyone know if I can purchase dental insurance through the marketplace, or this might even be through the company not sure, outside of the open enrollment period of the marketplace? I am thinking of just putting this off for a couple of months until I am able to get more info.

Thanks!
tj
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Joined: Thu Dec 24, 2009 12:10 am

Re: Dental insurance tax deductible for sole proprietor?

Post by tj »

I don't see why the self employed health insurance deduction wouldn't include dental, if that is what you are asking.
Topic Author
Infomom2
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Re: Dental insurance tax deductible for sole proprietor?

Post by Infomom2 »

tj wrote: Fri Nov 20, 2020 1:36 pm I don't see why the self employed health insurance deduction wouldn't include dental, if that is what you are asking.

Yes, that is what I am asking. Thank you. Just didn't know if it was only for general medical or not.
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HueyLD
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Re: Dental insurance tax deductible for sole proprietor?

Post by HueyLD »

Infomom2 wrote: Fri Nov 20, 2020 1:30 pm So, 2020 is first year having my own business. I am eligible for health insurance through the marketplace and for 2020 chose to also purchase dental insurance. I read through the past threads and know its hard to know if dental insurance is worth it, there are discount plans, etc. My dental insurance is costing my $40/mo and does cover my particular dentist. My dentist also works with a discount plan called AVS.

My question: If I qualify for tax deduction for my health care (medical insurance) premium, will I qualify for the deduction for a dental premium? I was hoping to know that by the time I had to renew the dental insurance for 2020, but I have not been able to find an accountant to just talk to me. They all say, contact me at tax time (I think I am pretty much small potatoes in terms of my needs/how much I would owe them compared to larger businesses). The reason I chose to go with the $40/mo plan for 2020 was that I hoped it would be tax deductible, but I don't know if that is true so am torn about if I should continue it or switch to a discount plan for 2021.

Also, not a tax question, but does anyone know if I can purchase dental insurance through the marketplace, or this might even be through the company not sure, outside of the open enrollment period of the marketplace? I am thinking of just putting this off for a couple of months until I am able to get more info.

Thanks!
Let me direct you to what the IRS says in Pub. 535:

“ Self-Employed Health Insurance Deduction

You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance also can cover your child who was under age 27 at the end of 2019, even if the child wasn’t your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.
....

The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business.

For self-employed individuals filing a Schedule C or F, a policy can be either in the name of the business or in the name of the individual.”
Topic Author
Infomom2
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Re: Dental insurance tax deductible for sole proprietor?

Post by Infomom2 »

HueyLD wrote: Fri Nov 20, 2020 2:21 pm
Let me direct you to what the IRS says in Pub. 535:

“ Self-Employed Health Insurance Deduction

You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance also can cover your child who was under age 27 at the end of 2019, even if the child wasn’t your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.
....

The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business.

For self-employed individuals filing a Schedule C or F, a policy can be either in the name of the business or in the name of the individual.”

Thank you! That answers the question!
Last edited by Infomom2 on Fri Nov 20, 2020 2:24 pm, edited 1 time in total.
tj
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Re: Dental insurance tax deductible for sole proprietor?

Post by tj »

Infomom2 wrote: Fri Nov 20, 2020 2:12 pm
tj wrote: Fri Nov 20, 2020 1:36 pm I don't see why the self employed health insurance deduction wouldn't include dental, if that is what you are asking.

Yes, that is what I am asking. Thank you. Just didn't know if it was only for general medical or not.
The larger issue is going to if your activity is a business or a hobby, because if you are not self employed, you would have to take medical expenses on Sch A.
Topic Author
Infomom2
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Re: Dental insurance tax deductible for sole proprietor?

Post by Infomom2 »

tj wrote: Fri Nov 20, 2020 2:24 pm
Infomom2 wrote: Fri Nov 20, 2020 2:12 pm
tj wrote: Fri Nov 20, 2020 1:36 pm I don't see why the self employed health insurance deduction wouldn't include dental, if that is what you are asking.

Yes, that is what I am asking. Thank you. Just didn't know if it was only for general medical or not.
The larger issue is going to if your activity is a business or a hobby, because if you are not self employed, you would have to take medical expenses on Sch A.
Its definitely a business. Its an LLC registered with my state and my only source of income.

I know this isn't a tax question, so I will post in another sub0forum if no responses, but does anyone know if I can buy dental insurance at any point and am not limited to open enrollment? I just don't feel ready to make that decision yet and need to pick a medical health plan (not dental) by 12/15.
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HueyLD
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Re: Dental insurance tax deductible for sole proprietor?

Post by HueyLD »

“ In the Marketplace, you can get dental coverage 2 ways: as part of a health plan, or by itself through a separate, stand-alone dental plan.

IMPORTANT:
You can’t buy a Marketplace dental plan unless you’re buying a health plan at the same time.”

https://www.healthcare.gov/coverage/dental-coverage/
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tfb
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Re: Dental insurance tax deductible for sole proprietor?

Post by tfb »

Infomom2 wrote: Fri Nov 20, 2020 2:30 pm I know this isn't a tax question, so I will post in another sub0forum if no responses, but does anyone know if I can buy dental insurance at any point and am not limited to open enrollment? I just don't feel ready to make that decision yet and need to pick a medical health plan (not dental) by 12/15.
You can if you buy it directly from an insurance company outside the marketplace. For example, Delta Dental sells plans to individuals. There may be an exclusion period for major services.
Harry Sit, taking a break from the forums.
Topic Author
Infomom2
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Re: Dental insurance tax deductible for sole proprietor?

Post by Infomom2 »

tfb wrote: Fri Nov 20, 2020 3:48 pm
Infomom2 wrote: Fri Nov 20, 2020 2:30 pm I know this isn't a tax question, so I will post in another sub0forum if no responses, but does anyone know if I can buy dental insurance at any point and am not limited to open enrollment? I just don't feel ready to make that decision yet and need to pick a medical health plan (not dental) by 12/15.
You can if you buy it directly from an insurance company outside the marketplace. For example, Delta Dental sells plans to individuals. There may be an exclusion period for major services.
Thank you!
Soon2BXProgrammer
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Re: Dental insurance tax deductible for sole proprietor?

Post by Soon2BXProgrammer »

Just so you know, some people have luck with dental discounts plans that are just negotiated rates via an insurance company, instead of an actual insurance plan.

https://www.cignadentalplans.com/plans/ ... s-by-cigna

or:

https://www.careington.com/

I haven't done this personally, but its something I'm aware of.
Topic Author
Infomom2
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Re: Dental insurance tax deductible for sole proprietor?

Post by Infomom2 »

Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:12 pm Just so you know, some people have luck with dental discounts plans that are just negotiated rates via an insurance company, instead of an actual insurance plan.

https://www.cignadentalplans.com/plans/ ... s-by-cigna

or:

https://www.careington.com/

I haven't done this personally, but its something I'm aware of.
Thank you! Yes, I do want to look into these too. I wonder if this would not be tax deductible..and that is the dilemma.
tj
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Joined: Thu Dec 24, 2009 12:10 am

Re: Dental insurance tax deductible for sole proprietor?

Post by tj »

Thank you! Yes, I do want to look into these too. I wonder if this would not be tax deductible..and that is the dilemma.
Don't let the tax tail wag the spending dog.
Soon2BXProgrammer
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Re: Dental insurance tax deductible for sole proprietor?

Post by Soon2BXProgrammer »

Infomom2 wrote: Fri Nov 20, 2020 4:42 pm
Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:12 pm Just so you know, some people have luck with dental discounts plans that are just negotiated rates via an insurance company, instead of an actual insurance plan.

https://www.cignadentalplans.com/plans/ ... s-by-cigna

or:

https://www.careington.com/

I haven't done this personally, but its something I'm aware of.
Thank you! Yes, I do want to look into these too. I wonder if this would not be tax deductible..and that is the dilemma.
oh maybe for a business owner, this might not be ideal, you will have to do the math to see what is the lowest aftertaxes costs.

The people who it works best for are those who need more receipts for HSA deductible expenses. the plan itself isnt deductible, but all of the actual cleanings end up being HSA reimbursable expenses. (there are people who already have very large HSA balances, so this is a strategy to generate more receipts)
tj
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Joined: Thu Dec 24, 2009 12:10 am

Re: Dental insurance tax deductible for sole proprietor?

Post by tj »

Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:46 pm
Infomom2 wrote: Fri Nov 20, 2020 4:42 pm
Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:12 pm Just so you know, some people have luck with dental discounts plans that are just negotiated rates via an insurance company, instead of an actual insurance plan.

https://www.cignadentalplans.com/plans/ ... s-by-cigna

or:

https://www.careington.com/

I haven't done this personally, but its something I'm aware of.
Thank you! Yes, I do want to look into these too. I wonder if this would not be tax deductible..and that is the dilemma.
oh maybe for a business owner, this might not be ideal, you will have to do the math to see what is the lowest aftertaxes costs.

The people who it works best for are those who need more receipts for HSA deductible expenses. the plan itself isnt deductible, but all of the actual cleanings end up being HSA reimbursable expenses. (there are people who already have very large HSA balances, so this is a strategy to generate more receipts)
At what age would one ideally start spending them down?
Soon2BXProgrammer
Posts: 1108
Joined: Mon Nov 24, 2014 11:30 pm

Re: Dental insurance tax deductible for sole proprietor?

Post by Soon2BXProgrammer »

tj wrote: Fri Nov 20, 2020 6:38 pm
Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:46 pm
Infomom2 wrote: Fri Nov 20, 2020 4:42 pm
Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:12 pm Just so you know, some people have luck with dental discounts plans that are just negotiated rates via an insurance company, instead of an actual insurance plan.

https://www.cignadentalplans.com/plans/ ... s-by-cigna

or:

https://www.careington.com/

I haven't done this personally, but its something I'm aware of.
Thank you! Yes, I do want to look into these too. I wonder if this would not be tax deductible..and that is the dilemma.
oh maybe for a business owner, this might not be ideal, you will have to do the math to see what is the lowest aftertaxes costs.

The people who it works best for are those who need more receipts for HSA deductible expenses. the plan itself isnt deductible, but all of the actual cleanings end up being HSA reimbursable expenses. (there are people who already have very large HSA balances, so this is a strategy to generate more receipts)
At what age would one ideally start spending them down?
We have 80k+ in an HSA and only 20kish of receipts... my personal goal is to keep generating receipts... but we keep adding to the HSA as well..
tj
Posts: 3740
Joined: Thu Dec 24, 2009 12:10 am

Re: Dental insurance tax deductible for sole proprietor?

Post by tj »

Soon2BXProgrammer wrote: Fri Nov 20, 2020 7:04 pm
tj wrote: Fri Nov 20, 2020 6:38 pm
Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:46 pm
Infomom2 wrote: Fri Nov 20, 2020 4:42 pm
Soon2BXProgrammer wrote: Fri Nov 20, 2020 4:12 pm Just so you know, some people have luck with dental discounts plans that are just negotiated rates via an insurance company, instead of an actual insurance plan.

https://www.cignadentalplans.com/plans/ ... s-by-cigna

or:

https://www.careington.com/

I haven't done this personally, but its something I'm aware of.
Thank you! Yes, I do want to look into these too. I wonder if this would not be tax deductible..and that is the dilemma.
oh maybe for a business owner, this might not be ideal, you will have to do the math to see what is the lowest aftertaxes costs.

The people who it works best for are those who need more receipts for HSA deductible expenses. the plan itself isnt deductible, but all of the actual cleanings end up being HSA reimbursable expenses. (there are people who already have very large HSA balances, so this is a strategy to generate more receipts)
At what age would one ideally start spending them down?
We have 80k+ in an HSA and only 20kish of receipts... my personal goal is to keep generating receipts... but we keep adding to the HSA as well..
That's a better ratio than me! I have $21k in the HSA with about $1k of receipts. I guess after retirement, the expenses will go up when insurance isn't paid for pre-tax

LTC premiums can be used too, subject to the annual limits. I guess one would need to keep track of each year's limits....

https://apps.irs.gov/app/vita/content/0 ... l=advanced
Lazareth
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Location: New England

Re: Dental insurance tax deductible for sole proprietor?

Post by Lazareth »

I was self-employed for 30 years. I would pay the dental coverage premium just as any deductible business expense.
a/66, retired, married, enjoy p/t employment.
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