A retired court reporter & has Sch C inc. She kept the county's hlth ins & the prems were deducted on her mthly county pension pymt. Can I deduct the prems pd on Sch C?

[melissagum912]

My wife retired as a court reporter in July 2018 and remained an independent contractor for transcripts produced after retirement from the county's court system.  She opted to keep the county's health insurance because it is very good and the premiums are paid through her monthly pension payment.  The full amount of the pension is taxed then the premiums are taken out reducing her actual monthly amount.  The total amount of health insurance premiums paid is on the monthly Statement of Benefits and Deductions.  Can I deduct those health insurance premiums paid for her and spouse on Schedule C, line 15?

[HelenaC · Accepted solution]

In addition to paying the health insurance premiums with after tax monies, 

• You can only claim the health insurance premiums write-off for months when neither you nor your spouse were eligible to participate in an employer-subsidized health plan. For example, if you were single and ineligible for any employer-provided health plan during the last six months of the year because you left your job and started your own business, you can claim the deduction for premiums you paid for coverage during that six-month period.
• Earned income limitation: 
  The deduction cannot exceed the earned income you collect from your business. For example, if your self-employment activity is a sole proprietorship that generated a tax loss for the year, you’re not allowed to claim the deduction because the business doesn’t generate any positive earned income.

If all the requirements above are met, yes, you may deduct premiums that you pay for medical, dental and qualifying long-term care insurance coverage for yourself, your spouse and your dependents. This health insurance write-off is entered on page 1 of Form 1040, which means you benefit whether or not you itemize your deductions.

Additional information: Can I deduct my health insurance premiums when I’m self-employed?