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Can self-employed wife expense unsubsidized Cobra paid to former company (not directly to Insurance Co). I am on Medicare. Can she expense both or just my Medicare costs?

I wonder since my wife pays Cobra directly to former employer rather than directly to insurance company, she might not be able to take the Cobra cost as a business expense since the policy is likely NOT in her name or the name of HER new business. Instead, she could show it via itemization if we don't take the standard deduction. (Hope I am wrong!!)

But information suggests that if she is self-employed and I am on Medicare (I am over 66), that the Medicare-related premiums might be expensed (rather than itemized) in either case (no matter how she has to treat her Cobra). Itemization won't yield any benefit to us since we will take the standard deduction

     Thank you!

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1 Best answer

Accepted Solutions
JulieR
Expert Alumni

Can self-employed wife expense unsubsidized Cobra paid to former company (not directly to Insurance Co). I am on Medicare. Can she expense both or just my Medicare costs?

Unfortunately, under these circumstances, neither the COBRA premiums nor your Medicare premiums can be deducted as your wife's self-employed health insurance expense.

You are correct that the COBRA premiums are not deductible as part of the self-employed health insurance deduction. COBRA premiums are considered employer-provided health insurance premiums. For premiums to qualify for the self-employed health insurance deduction, the plan needs to be set up as follows:

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

So, in order for your wife to deduct self-employed health insurance expenses, she would first need to be paying health insurance premiums for a policy in her/her business' name to also include your Medicare premium costs.

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1 Reply
JulieR
Expert Alumni

Can self-employed wife expense unsubsidized Cobra paid to former company (not directly to Insurance Co). I am on Medicare. Can she expense both or just my Medicare costs?

Unfortunately, under these circumstances, neither the COBRA premiums nor your Medicare premiums can be deducted as your wife's self-employed health insurance expense.

You are correct that the COBRA premiums are not deductible as part of the self-employed health insurance deduction. COBRA premiums are considered employer-provided health insurance premiums. For premiums to qualify for the self-employed health insurance deduction, the plan needs to be set up as follows:

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

So, in order for your wife to deduct self-employed health insurance expenses, she would first need to be paying health insurance premiums for a policy in her/her business' name to also include your Medicare premium costs.

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