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hgs087
Level 2

Self-Employed Health Insurance Deduction

Does the limitation on not taking the deduction if one is covered by a subsidized plan apply only to deducting premiums for the subsidized plan, or to deducting premiums for any health insurance coverage. I am covered by a retiree plan (subsidized) from my former employer. That plan is basically a Medicare supplement plan, which requires me to pay premiums to the government for Medicare B and D. May I deduct the Medicare premiums (but not the retiree insurance premiums) from my self-employment income?

Also, am I correct that one may deduct premiums from a qualified Long Term Care policy, so long as that insurance is not subsidized?

Thanks, Gil Smith

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Accepted Solutions
MaryK4
Employee Tax Expert

Self-Employed Health Insurance Deduction

Yes, for the Self-Employed Health Insurance deduction, you can deduct any expenses you paid that were not subsidized, including the Long Term Care insurance.

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MaryK4
Employee Tax Expert

Self-Employed Health Insurance Deduction

Gil- That is correct- the Medicare B&D premiums can be deducted as Self-Employed Health Insurance.  The supplement premiums paid through your prior employer cannot be deducted.

@hgs087

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13 Replies
MaryK4
Employee Tax Expert

Self-Employed Health Insurance Deduction

Yes, for the Self-Employed Health Insurance deduction, you can deduct any expenses you paid that were not subsidized, including the Long Term Care insurance.

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hgs087
Level 2

Self-Employed Health Insurance Deduction

Hi MaryK,

Just to be sure -- am I correct that I can also deduct Medicare parts B & D premiums (which are not subsidized), but cannot deduct the Medicare supplement premiums (which are subsidized).

Thanks,

-Gil Smith

MaryK4
Employee Tax Expert

Self-Employed Health Insurance Deduction

Gil- That is correct- the Medicare B&D premiums can be deducted as Self-Employed Health Insurance.  The supplement premiums paid through your prior employer cannot be deducted.

@hgs087

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Judy Born
New Member

Self-Employed Health Insurance Deduction

Where do I deduct them on the forms

KrisD15
Employee Tax Expert

Self-Employed Health Insurance Deduction

It is an option included on the self-employment (Schedule C) expenses list.

Enter it there as an expense. 

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Dave_E
New Member

Self-Employed Health Insurance Deduction

My wife and I are retired but are self-employed in property management partnership LLC.  We each have Medicare and private health insurance.  We also have long term care policies.  We take no salary from  the LLC other than  the profits/losses.  Are we eligible to take the Self-Employed Health Insurance Deduction?  If so. how do we enter the information in TurboTax?

JeffreyR77
Expert Alumni

Self-Employed Health Insurance Deduction

You are able to deduct the Self-employed Health Insurance deduction if you have a profit.  Enter your insurance expense in the self-employed business expense section of TurboTax Self-Employed:  

 

 

dafcpa
Level 2

Self-Employed Health Insurance Deduction

How do you get the deduction entered on the 1040?  I keep getting directed to the line 16 of the 1040 worksheet but the system does not let me enter the premium, override the amount or direct me to another location.  This is from an LLC so can not enter on the Schedule C.

BillM223
Employee Tax Expert

Self-Employed Health Insurance Deduction

As it turns out, you enter this in the K-1(1120) interview.

 

Do a Search (upper right) for k-1 and click on the jump-to link (Mac users must find K-1 in the Topics List).

 

Then choose the S corporations, and start the K-1 (1120) interview. 8 or so screens in, you will see a screen that is titled, "Other Situations". Check the box that says, "I personally paid health insurance and/or long term care insurance premiums for myself and my family, and the S corporation paid me wages."

 

When you hit Continue, the next screen will ask you for the amount of the premiums paid.

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noodad
Level 4

Self-Employed Health Insurance Deduction


@MaryK4 wrote:

Yes, for the Self-Employed Health Insurance deduction, you can deduct any expenses you paid that were not subsidized, including the Long Term Care insurance.


@MaryK4 I think that sounds reasonable, but unfortunately https://turbotax.intuit.com/tax-tips/home-ownership/deducting-health-insurance-premiums-if-youre-sel... seems to say otherwise:

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.

So I think that would apply to only medical premiums, not all of the other mentioned types of premiums (like dental and long-term care) if those others are not subsidized and offered to the taxpayer? Is the TurboTax tip page incorrect about that?

BillM223
Employee Tax Expert

Self-Employed Health Insurance Deduction

"So I think that would apply to only medical premiums, not all of the other mentioned types of premiums (like dental and long-term care) if those others are not subsidized and offered to the taxpayer?"

 

Yes, you are correct to wonder. The Help page is referring only to like premiums, such as for general health coverage. It does not refer to additional coverage that is (1) deductible on Schedule A as a medical expense, and (2) for which there is no corresponding employer-based coverage. 

 

"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."

 

The phrase "health insurance premiums " refers to whatever is in the employer-subsidized plan, and not all possible coverage.

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Kevlor2862
New Member

Self-Employed Health Insurance Deduction

I am a greater than 2% shareholder of S corp.  I am told I need to add my health insurance premiums onto Schedule 1 line 16 for adjustments to income but my Turbo Tax deluxe will not let me do that.  Do I need to upgrade to some other level?

MarilynG1
Employee Tax Expert

Self-Employed Health Insurance Deduction

@Kevlor2862 You will need to upgrade to enter a K-1. 

 

Click this link for instructions for How to Claim Health Insurance for S Corp Shareholder

 

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