Author Topic: Deducting Health Insurance Premiums for full time landlords?  (Read 1916 times)

freeatlast

  • 5 O'Clock Shadow
  • *
  • Posts: 74
So, I just left the status of "employee" and plan to live off the rental income from my two properties - which will be pretty bare bones meeting my expenses.  In the past, as a full time employee with employer sponsored health care, I used Schedule E (supplemental income) for my rentals. Now that my rentals are my only income, and I am more actively doing property upgrades, and I am paying for health insurance out of pocket (ouch) with Obamacare, could I switch over to a schedule C small business schedule and somehow deduct my health care expenses? These premiums are high and it would actually be of great help!  Any advice provided is much appreciated!

bacchi

  • Magnum Stache
  • ******
  • Posts: 4031
Re: Deducting Health Insurance Premiums for full time landlords?
« Reply #1 on: May 30, 2017, 04:49:39 PM »
The short answer is "No".

The long answer is that you could convert rental income into earned income if you're, for example, a real estate agent or in the business of managing rentals. Of course, if it's rental income, it's also subject to self employment tax.

jwright

  • Bristles
  • ***
  • Posts: 267
Re: Deducting Health Insurance Premiums for full time landlords?
« Reply #2 on: May 31, 2017, 01:35:24 PM »
Rental income is not self-employment income so the deduction doesn't work.

The only work around I can see is to create your own management company and pay yourself a management fee deducted on your rentals.  Then use the management fee income as an offset to your medical premiums.  It would probably need to be an S-Corp, so you'd need to include the health insurance as a salary to yourself in your W-2.  Lots of extra filings for not much savings.