Self Employed health insurance

[Shirley79]

Can the full amount of Medicare premiums be deducted as self employment health insurance on the Schedule C if the profit is only slightly more than the premiums?

[dbelling · Accepted solution]

self employed health insurance never decreases the income on schedule C...you enter it on Schedule C in the box for self employed and then it flows as a deduction on the form 1040.  The deduction is limited to net income of the business.

[Shirley79]

Thank you - I do understand that, but my question is... if a person has a small business and his net profit is say.... $2000, can he still claim the total Medicare premium of $1626 as the self employed insurance adjustment?

[Just-Lisa-Now-]

yes.

[Shirley79]

Can I give you one more example, please?       My client (married - both over 65 - receiving medicare)  has a house cleaning business.  They have a medicare supplement.  Can she deduct her supplement premium as well as Medicare premium on the 1040 as self-employed health insurance?  If so, she can't deduct any part of her husband's premiums, can she, since he does not share in the business?

Thanks for your patience. 

[dbelling]

If you are self-employed, you may be eligible to deduct premiums that you pay for medical, dental and qualifying long-term care insurance coverage for yourself, your spouse and your dependents. ...

[Shirley79]

I have read this information and the "may be" is what is confusing me.   

[Just-Lisa-Now-]

The "may be" part I think refers to the fact that you need to have net profit on Sch C, in order to take the SEHI deduction...so while it is deductible, if you don't have profit, it won't be.

[dbelling]

Exactly profit and then an adjustment is made to arrive at AGI...your software will handle this appropriately.  Debbie

[Shirley79]

Deducting both husband and wife's medicare premiums and supplemental health insurance premiums reduces the taxable income to zero.  Seems too good to be true, but I will amend their return claiming the deduction.