73 year old. I pay a portion of my monthly ins pre...
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debbieandwayne
Returning Member

73 year old. I pay a portion of my monthly ins premium and and part B medicare premiums & dental insurance premiums my wife and my self? Deductable from profit?

This involves a small part time contract activity.  File a 1099 NEC
3 Replies
ToddL99
Employee Tax Expert

73 year old. I pay a portion of my monthly ins premium and and part B medicare premiums & dental insurance premiums my wife and my self? Deductable from profit?

[Edited 02/23/21 8:06 AM PST]

Yes, you can deduct  Medicare premiums as a business expense - "Self-Employed Health Insurance Deduction"

 

From Publication 535 (2020), Business Expenses 

Self-Employed Health Insurance Deduction

You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The health insurance can cover your child who was under age 27 at the end of 2020, even if the child wasn’t your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

One of the following statements must be true.

  • You were self-employed and had a net profit for the year reported on Schedule C (Form 1040) or Schedule F (Form 1040).

  • You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), box 14, code A.

  • You used one of the optional methods to figure your net earnings from self-employment on Schedule SE.

  • You received wages in 2020 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2.

 

The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business.

  • For self-employed individuals filing a Schedule C (Form 1040) or F (Form 1040), a policy can be either in the name of the business or in the name of the individual.

  • For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or the partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan won’t be considered to be established under your business.

  • For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or the S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 in box 1 as wages to be included in your gross income. Otherwise, the insurance plan won’t be considered to be established under your business.

 

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. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer can’t be used to figure the deduction.

Take the deduction for self-employed health insurance on Schedule 1 (Form 1040), line 16.

 

debbieandwayne
Returning Member

73 year old. I pay a portion of my monthly ins premium and and part B medicare premiums & dental insurance premiums my wife and my self? Deductable from profit?

Correcting my one reply. 

 

You are not applying this situation to "self employed".  You are applying it to an "employee".  I need to understand the tax change in 2012 that permitted the deduction for medicare premiums for self employed individuals.  This deduction appears to be valid up to the amount of net income.  That is what I am trying to verify. 

debbieandwayne
Returning Member

73 year old. I pay a portion of my monthly ins premium and and part B medicare premiums & dental insurance premiums my wife and my self? Deductable from profit?

This is what I am looking at. 

 

Q. I am self-employed and my husband is on Medicare. I deduct my health insurance premiums on my income tax. I recently heard that I also can deduct his Medicare Part A, Part B, Part C and Part D premiums. Is this really true?

A. Yes. In 2012, the IRS ruled that Medicare insurance premiums can be counted. Under the ruling, Medicare premiums covering the self-employed individual – as well as his or her spouse, dependents, and under-age-27 children – are deductible.

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