Medical Insurance Deduction

Forum|Forum|2 years ago
March 18, 2024
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I am retired and operate a Schedule C business where I earn money for doing small repairs in the community. I do not make a lot of money, usually about 4 to 5 thousand dollars per year. I recently read an article that stated that the IRS now allows you to deduct all premiums paid for Medical Insurance INCLUDING Medicare Insurance against the income you earned as a sole proprietor, a partner in a partnership, or an S corporation shareholder.

That seems like a HUGE benefit. I literally will be able to eliminate all the income I earn on the Schedule C by deducting my Medical Insurance premiums. Does anyone know if this is accurate? This seems like it's too good to be true and an area where it could be abused. I would not otherwise get any benefit from these Medical Insurance Premiums since I do not itemize my deductions. If there are any knowledgeable accountants out there, please provide me with your thoughts on this subject. Thanks in advance for responding.

Also, I am a partner in a Partnership that owns a couple rental properties. How would I deduct the Medical Insurance Premiums against my portion of the Partnership Income?

Best answer by MinhT1

As a self-employed person, you can deduct above the line (without using itemized deductions) all health insurance premiums paid out of pocket, including Medicare Part B and D.

In TurboTax Premium Online, you enter your health insurance premiums in the Business Expenses section of your business.

The deduction is limited to the amount of net income (profit) of your business.

Go to Business Expenses > Other Common Business Expenses > Health Insurance Premiums.

TurboTax will transfer the amount to Part II line 17 of Schedule 1 of form 1040 (self-employed health insurance deduction).

For a partnership, you can only claim the Self-employed health deduction if you're a general partner or considered a general partner. You can only claim it if your claim as a self-employed person is limited because of income. You can't claim the same insurance premiums twice.

Please read this TurboTax Help article for more information.