Part B Medicare premiums paid out of SS

[USMC2021]

Wife and I file jointly.  We paid SS premiums.  I am a sole proprietor of a business.  When I entered my business information and deductions the TT guide said to enter my SS premiums in my expenses for both of us.  When I checked my income entries, it has the SS premiums populated automatically there also. I assume I am getting a double deduction for the payments because it shows double the amount when I review our return.  Which place should I enter the payments?  Can I split the payments between my business and the income section - my wife's in one and mine in the other?  I do not want to create a red flag entry.  

[Mike9241]

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 as SE-health insurance. the deduction will be limited to net Self-employment income.

there is are warnings on the page where the Social Security income is entered. if self-employed do not enter medicare premiums types  B, C and D here. Enter them on the business activity schedule in the section for self-employed health insurance. (Do not enter on schedule C on the line for insurance) 

[USMC2021]

Thank you for the response.  Entering our Medicare part b in my self employment will only use about 70 percent of our Medicare premiums.  Does the unused portion carry over to next tax year?  I would surmise the answer is "no", but thought I would ask.

[VolvoGirl]

No it doesn’t carryover.  If your health ins exceeds your net self-employment income it gets split. An amount equal to your net self-employment income goes on Form 1040 Schedule 1 line 17 (to 1040 line 10) and the remainder gets added in to medical expenses on Schedule A.

Medicare plan B payments are qualified as Self-employed medical insurance premiums and should be entered under Business instead of in the Social Security Benefits entry area.  So go back and take it off your SSA-1099 entry.

[USMC2021]

I am not trying to be a pain, but want to ensure I understand. I take the total Medicare for my wife and me and deduct as much as my Self Employment (SE) net income permits (when I included all of our Medicare payments, it caused me to have a net loss) on my net self-employment income.  So, I take the total Medicare payments for us, and calculate how much causes my net SE income to reach zero and then apply the rest under the insurance section on the 1040.

My business income is less than 10% of our gross reportable income (Military retirement, VA disability, Civil Service retirement and SS for both of us). Does that make any difference in the resolution of this issue?  

[VolvoGirl]

You don’t have to calculate anything.  Turbo Tax does it for you.  It will automatically send the rest of it to Schedule A Medical Deductions.  And the health insurance won’t actually reduce your Schedule C self employment Net Profit .  It goes on Form 1040 Schedule 1 line 17 (to 1040 line 10).  So you still pay self employment on the whole Net Profit.   

[VolvoGirl]

See IRS 1040 Instructions for Schedule 1 line 17 on page 89 & 90.  There is a worksheet on page 90.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf