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

by Intuit Updated 3 months 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:

  1. Go to Screen 10, Wages, Salaries, Tips and enter the information from the W-2 .
  2. Select Other Information from the left sections menu.
  3. Select the box next to More than 2% shareholder in S corporation.
  4. Enter the appropriate amount in the Medicare wages and tips field (code 7).
  5. Go to Screen 20, Passthrough K-1's.
  6. Select S Corporation Information in the Passthrough K-1's box from the left menu.
  7. Select the appropriate schedule in the S Corporation box from the left menu.
  8. Select Part II - Information About the Shareholder from the left sections menu.
  9. Select the appropriate W-2 in the field Name or number of W-2 received by greater than 2% owner (code 241).
  10. 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:

  1. Go to Screen 24, Adjustments to Income.
  2. From the Sections select SE Health Insurance (7206).
  3. Enter the Premiums not entered elsewhere (excluding long-term care) (taxpayer code 16, spouse code 66).
  4. 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)
  5. Under the Form and Activity Name or Number subsection in the Form (Ctrl+ T) field select Schedule K-1 (1120-S).
  6. Select the applicable activity in Activity name or number.
  7. Enter the appropriate net earnings in Net profit of business under which plan is established [A].
  8. Go to Forms and view 7206.
  9. The deductible amount will flow to Form 1040, Line 29.

To override the SE health insurance deduction:

  1. Go to Screen 24, Adjustments to Income.
  2. From the Sections select SE Health Insurance (7206).
  3. 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.

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

  1. Go to Screen 10, Wages, Salaries, Tips and enter the information from the W-2 .
  2. Select Other Information from the left sections menu.
  3. Select the box next to More than 2% shareholder in S corporation.
  4. Enter the appropriate amount in the Medicare wages and tips field (code 7).
  5. Go to Screen 20, Passthrough K-1's.
  6. Select S Corporation Information in the Passthrough K-1's box from the left menu.
  7. Select the appropriate schedule in the S Corporation box from the left menu.
  8. Select Part II - Information About the Shareholder from the left sections menu.
  9. Select the appropriate W-2 in the field Name or number of W-2 received by greater than 2% owner (code 241).
  10. 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:

  1. Go to Screen 24, Adjustments to Income.
  2. Select SE Health Insurance in the left sections menu.
  3. Enter the appropriate amount in the field Premiums not entered elsewhere (excluding long-term care).
  4. Enter the appropriate information for Long-term Care Premiums if applicable.
  5. Under Net Earnings, select Schedule K-1 (1120-S) in the Form (Ctrl+T) field.
  6. Select the applicable activity in Activity name or number.
  7. Enter the appropriate net earnings in Net earnings [A].
  8. Go to Forms and view the Worksheets.
  9. Lacerte will generate a worksheet to calculate the Self-Employed Health Insurance Deduction.
  10. 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.
Lacerte Tax

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