You cannot take a deduction for medical expenses that are greater than your income from self-employment. So, yes, it does matter if the premiums are more than your business proceeds. The premiums can reduce your income to $0, but it cannot result in a loss. You can enter the full premiums, but when you see the deduction on line 17 of your Schedule 1, you may see an amount less than what you paid.
Example, you paid total medical premiums with your Medicare of $8,500, your business profit was only $7,236. Your health insurance deduction will be limited to $7,236.
The income from the farm rental may or may not count towards this deduction. If the rental income is considered investment income, this will not be part of your health insurance deduction. If this income is on a Schedule F, then the income would be eligible for the health insurance deduction.
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