 Now, notice if you're sole proprietorship, for example, then if you were growing, you might end up being like try to try to expand by becoming a partnership. That means you have two or more people, which might mean that you have to report earnings on a separate form that would then flow into your 1040, but still might be subject to self-employment tax. So you're still kind of in a similar situation, possibly self-employment tax. You might set up an LLC, which is in structure a little bit similar to a partnership. So then you have a similar situation there, and then the other option is an S-Corporation. These are flow-through types of entities. The S-Corporation gets a little bit more complicated. That's more complicated than that. Because it's treated not like a partnership, but like it's kind of like a corporation with regards to the shares, but it's still basically a flow-through entity. And that's where you got to be really careful with the calculation of the self-employment tax because you might not have the same. You don't have the same kind of capacity to calculate the self-employment tax because you're forced to pay yourself in essence wages in that situation. And then so then you might have the health insurance situation with regards to paying yourself kind of wages. So it gets a little bit tricky. So note that when you're dealing with business tax returns, you have that kind of problem as well in terms of they're going to inevitably ask, am I in the ideal business entity? Should I be a sole proprietorship? Should I be an LLC? Should I be a partnership? Should I take on partners? Or should I hire contractors and employees? As opposed to taking on other partners. And that opens up a whole other line of questioning. Because if you're a sole proprietor reporting on a Schedule C, that's the easiest thing to do clearly. If you take on an equity partner, then you have that added level of complexity and liability because now the partner can make decisions and whatnot, which you might be liable for. And then you might have to file another tax return, which greatly increases just the filing requirements with regards to it as well. Your other option would be to hire contractors or hire or have them as an employee. And then you've got the question of liability, which often comes up with regards to an LLC being set up or an S corporation, which you could set up even with a very small business possibly as a sole proprietor or possibly being able to set a single member LLC or an S corporation. Oftentimes people arguing for the S corporation are saying that they can get an advantage on some of the self-employment taxes that you would be paying. But it's a little bit messy of a scenario and it adds a whole lot of complexity. If your only reason going from a sole proprietorship to an S corporation is for that particular reason, it might not be worth it. But those are just a quick look at that. The insurance plan must be established under your business. Your personal service must have been material income producing factor in the business. So if you are filing a Schedule C or F, the policy can be either in your name or in the name of the business. So that gets a little bit tricky as well because your sole proprietorship, you might have a different business name or putting it in your name. If you have another type of business entity, you want to make sure like an S corporation that you're setting up your health insurance in such a way that's appropriate to make sure that you could get the benefit of the deduction related to it. So if you are a partner, the policy can be either in your name or in the name of the partnership. So partnership situation similar to a sole proprietor, but now you have two people, a partnership. So usually in a partnership, there's a partnership. And therefore you typically have another kind of return you have to file, but it still flows through to your 1040. It's a flow through entity. So you still have that social security and Medicare calculation, self employment tax situation. So you can either pay the premiums yourself or your partnership can pay them and report them as guaranteed payments. So if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premiums as guaranteed payments. So if you are more are a more than 2% shareholder in an S corporation, the flow through entity, the policy can be either in your name or in the name of the S corporation. You can either pay the premiums yourself or the S corporation can pay them and report them as wages. If the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you. You can deduct the premiums only if the S corporation reports the premiums paid or reimbursed as wages in box one of your form W2 in 2022. And you also report the premium payment or reimbursement as wages on form 1040 or 1040 SR line one. So this word where it gets a little bit messy because the S corporation, the flow through income still flows through to your form 1040, but the flow through amount usually isn't subject then at that point in time to self employment tax, which means the IRS kind of forces you to treat yourself as an employee of your S corporation. So even if you set up an S corporation and you were like the only owner of the S corporation, then you'd still have to kind of pay yourself an appropriate amount of wages because that's how the IRS is going to get their social security and Medicare. So that's where it gets a little bit a little bit messy. So now you've got you paid yourself and you have the flow through of whatever excess income is going through the S corporation that's going to the 1040. So, but if you were also eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2022 amounts paid for health insurance coverage for that month can't be used to figure the deduction. So also if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2022. Don't use amounts paid for coverage for that month to figure the deduction. So in other words, you want to also keep in mind the idea that like if your schedule see sole proprietorship or if you have your own business in whatever capacity and that's your only income, then you're going to have to be paying self-employment in that situation and dealing with it through your business somehow. If, however, you also have access to health insurance through the W2 income either from yourself because you have another job where you have access to health insurance or your spouse because typically if your spouse has access to health insurance, then it's possible for the whole family to have access. You want to make sure that that doesn't clash with your capacity to deduct health insurance if you have the ability to join a plan through an employer. So example, so if you were eligible to participate in a subsidized health plan maintained by your spouse's employer from September 30th through December 31st, you can't use amounts paid for health insurance coverage for September through December to figure your deductions. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. So amounts paid for health insurance coverage from retirement plan distributions that were non-taxable because you are a retired public safety officer can't be used to figure the deduction. So for more details on that, you can go to publication 535 on the IRS website, of course, iris.gov, iris.gov, if you qualify to take the deduction, use the self-employed health insurance deduction worksheet to figure the amount you can deduct. Obviously, tax software is quite useful for that as well to kind of help you do the deduction and then you can go through it and deconstruct it and make sure it makes sense to you so you can explain it and make sure it's correct. Exceptions, use publication 535 instead of self-employed health insurance deduction worksheet in these instructions to figure your deduction if any of the following applies. You had more than one source of income subject to self-employment tax. You file form 2555. You are using amounts paid for qualified long-term insurance to figure the deduction. So again, software kind of is useful oftentimes to be selecting the proper return if you do the proper data input, apply the proper worksheet, and then you can kind of back into it and make sure that it's filling things out in the right way. Use publication 974 instead of the worksheet in these instructions if the insurance plan was considered to be established under your business and was obtained through the marketplace and advanced payment of the premium tax credit were made or you are claiming the premium tax credit.