For a S-corp member to be able to deduct health insurance premiums on line 29 of your 1040, your Medicare wages (box 5 of W-2) must equal or exceed your total health insurance premiums for the year. Your W-2 box 1 is not the limiting factor on whether your health insurance can be deducted on the first page of your 1040. The Form 1040, line 29 health insurance deduction is limited by your Medicare wages. You can deduct health insurance premiums up to the amount you have in box 5. If your box 5 wages don't cover all your health insurance premiums, you can still deduct the balance of your health insurance cost amount on Sched A, but only the portion that exceeds 10% of your income....but that's not nearly as sweet as a line 29 deduction.
