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Adjusting self-employment income for health insurance costs

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Money Talk > Taxes

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tomseeley
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Adjusting self-employment income for health insurance costs  Reply with quote  

I am self-employed. I get paid with a 1099-MISC each year, and I file a Sch C with my 1040.

Up till Feb 2009, I have had a self-pay health insurance policy, since I have no employer or other form of group health insurance.

Right or wrong, I have taken the cost of those monthly premiums as an adjustment (not a deduction) to my self-employment income, on line "whatever" on the front of the 1040.

As of Feb 2009, I have hit the big 6-5. I remain self-employed, and was self-employed throughout 2008.

I now have signed up for Medicare and I have also canceled my former blue cross/blue shield insurance and I have bought a Medicare supplement insurance plan instead.

Can I still take either or both of those monthly premiums for Medicare and the Medicare supplemental insurance as adjustments to my self-employment income?
Post Sun Feb 22, 2009 4:52 pm
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coaster
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It's been a long time since I did a Schedule C, but that's how I deducted health insurance when I was self-employed. The current Schedule C in TurboTax has that on line 15 of Part II. I'm unfamiliar with the "adjustment to income" but a deduction on Schedule C would be a reduction of income because it's 100% deductible. Your supplement would certainly be deductible on there. Medicare? Hmmmmm. Not sure because that comes straight out of your Social Security benefit. You never take receipt of the funds. Excuse me while I have to look at TurboTax again: ah, Medicare premiums ARE deductibe on Schedule A, so I don't see why they wouldn't also be deductibe on Schedule C. Pub 535 is the relevant IRS publication, but I didn't see anything about Medicare premiums in there. (back again) Ahhhhh....here we go. Download Pub 502 from the IRS website. It says in there that Medicare premiums are deductible. As to HOW to deduct them, if it was me, I'd do it on Schedule C. Smile

~Tim~
Post Sun Feb 22, 2009 6:44 pm
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