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Entering individual self-employed health insurance premiums from S-Corporation K-1 in Lacerte

SOLVED•by Intuit•181•Updated 1 month ago

Earned income is required to be able to take the self-employed health insurance deduction.

What's new for the Self-employed health insurance deduction for tax year 2023:

Starting in tax year 2023 the IRS has released Form 7206 to calculate the Self-employed health insurance deduction for the 1040. In tax years 2022 and prior, the IRS used the Self-employed health insurance deduction worksheet from the 1040 instruction booklet to calculate the allowable deduction on the 1040.

Follow these steps if health insurance premiums were reported on a W-2 starting in tax year 2023:

Go to Screen 10, Wages, Salaries, Tips and enter the information from the W-2 .
Select Other Information from the left sections menu.
Select the box next to More than 2% shareholder in S corporation.
Enter the appropriate amount in the Medicare wages and tips field (code 7).
Go to Screen 20, Passthrough K-1's.
Select S Corporation Information in the Passthrough K-1's box from the left menu.
Select the appropriate schedule in the S Corporation box from the left menu.
Select Part II - Information About the Shareholder from the left sections menu.
Select the appropriate W-2 in the field Name or number of W-2 received by greater than 2% owner (code 241).
Enter all Schedule K-1 information.
- Lacerte will include Medicare wages in net income for the self-employed health insurance deduction.

Follow these steps if health insurance premiums were not reported on W-2 in tax year 2023:

Go to Screen 24, Adjustments to Income.
From the Sections select SE Health Insurance (7206).
Enter the Premiums not entered elsewhere (excluding long-term care) (taxpayer code 16, spouse code 66).
Under the Long-term Care Premiums subsection, enter any applicable amounts in the corresponding fields.
- Premiums paid for self-employed person (taxpayer code 26, spouse code 76)
- Premiums paid by the taxpayer (code 34)
- Premiums paid by the spouse for the taxpayer (code 84)
Under the Form and Activity Name or Number subsection in the Form (Ctrl+ T) field select Schedule K-1 (1120-S).
Select the applicable activity in Activity name or number.
Enter the appropriate net earnings in Net profit of business under which plan is established [A].
Go to Forms and view 7206.
The deductible amount will flow to Form 1040, Line 29.

To override the SE health insurance deduction:

Go to Screen 24, Adjustments to Income.
From the Sections select SE Health Insurance (7206).
To make adjustments to the deduction use the Net Earning Adjustments subsection.
- The override for SE Health Insurance Deduction is no longer available. Use the adjustments to change the calculations on the 7206.

For tax year 2022 and prior:

Follow these steps if health insurance premiums were reported on a W-2:

Go to Screen 10, Wages, Salaries, Tips and enter the information from the W-2 .
Select Other Information from the left sections menu.
Select the box next to More than 2% shareholder in S corporation.
Enter the appropriate amount in the Medicare wages and tips field (code 7).
Go to Screen 20, Passthrough K-1's.
Select S Corporation Information in the Passthrough K-1's box from the left menu.
Select the appropriate schedule in the S Corporation box from the left menu.
Select Part II - Information About the Shareholder from the left sections menu.
Select the appropriate W-2 in the field Name or number of W-2 received by greater than 2% owner (code 241).
Enter all Schedule K-1 information.
- Lacerte will include Medicare wages in net income for the self-employed health insurance deduction.

Follow these steps if health insurance premiums were not reported on W-2:

Go to Screen 24, Adjustments to Income.
Select SE Health Insurance in the left sections menu.
Enter the appropriate amount in the field Premiums not entered elsewhere (excluding long-term care).
Enter the appropriate information for Long-term Care Premiums if applicable.
Under Net Earnings, select Schedule K-1 (1120-S) in the Form (Ctrl+T) field.
Select the applicable activity in Activity name or number.
Enter the appropriate net earnings in Net earnings [A].
Go to Forms and view the Worksheets.
Lacerte will generate a worksheet to calculate the Self-Employed Health Insurance Deduction.
The deductible amount will flow to Form 1040, Line 29.

To override the SE health insurance deduction:

Go to Screen 24, Adjustments to Income.
Select SE Health Insurance in the left sections list.
Select into the field SE health insurance deduction [O] to expand the entry box.

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