Income tax question OT

woodbutcher

Well-known Member
I realize that my question is not tool-related, but this forum seems to have some participants who have experience with tax matters, so I'd like some opinions about my situation. My wife and I are retired and on pension for me and annuity for her as a retired teacher. We have healthcare offered by her former employer, and we make quarterly payments to Medicare for Part B. I sold all my cattle last September and leased out my pastures and haymeadows. There is a provision allowing a self-employed health insurance deduction including Medicare premiums. We are not eligible for the deduction for our health coverage, but shouldn't our Medicare premiums still qualify for the deduction just like anybody else's would?
Butch
 
DaveH is the expert,but why can't you deduct your health insurance premiums? They should be deductible on line 29 of your 1040.
 
I have tried it but if you have to much income coming in you can't take it My wife and I medicare B , supplemental ,out of pocket, part D plan totaled to $9,900.00 and we couldn't deduct it. A CPA does my taxes.
 
Everything I've read about it says that if you are eligible for any kind of subsidized healthplan, even if you don't participate, you can't use this deduction.
 
There's a whole complicated thing that has to be filled out of you're using the ACA tax credit. My preparer had nightmarish problems with it the first few years,but that portion that you pay out of pocket and actually have to write a check for is deductible on line 29.
 
I think you take your premiums and other health care costs, add them up and the amount that exceeds 7.5% of your AGI is deductible. I could be wrong!
 
That's for medical expenses though. You can deduct all of the cost of health insurance premiums that you pay yourself. It levels the playing field since those who have it as a benefit of employment don't have to pay income tax on the cost of the premiums paid by the employer. Bad thing is,if you're self employed,you still have to pay Social Security self employment tax on that money since it's only deductible as a personal expense and not as a business expense. Apparently the deduction can't be used for Medicare premiums if you're retired.

I just wonder if they're deductible if you aren't retired? I'm eligible for Medicare in 26 months. I plan to take it,but not to retire and take SS. My wife is younger than I am and won't be eligible yet,so I'll have to keep paying for Blue Cross for her. I assume those premiums will still be deductible,I don't know why they wouldn't be,but it'll kinda suck if I can't deduct the Medicare premium.
 
According to google, any health insurance premiums you pay are considered medical expenses, so they come under the 7.5 per cent rule. That doesn't sound quite right to me though. It is different for self employment as I assume a farmer would be considered and then you fill out a separate work sheet. I always did as I was considered self employed after retirement from regular job. In the end I went through the work sheet etc but never had enough income that it mattered. I only had to pay self employment tax on profits from work I received money for. Didn't work last year so am done paying. Some advantages to being broke I guess.
 
There's no separate form for self employed. The reason being that they aren't deductible as a business expense. You just write off the total of the premiums on line 29 of your 1040. They are deductible as a business expense if you provide insurance for employees,but even then,only the premiums for employees are deductible,not your own.
 
Don't quite understand your statement. What I was referring to is the work sheet to figure out self employment tax. Have been doing it for years.
 
Ya,I've always had to file schedule SE. That's where they get me for the bulk of the taxes that I owe every year. I thought you meant there was a special form that you have to fill out pertaining to insurance premiums. There is one if you use the ACA tax credit,but otherwise,the amount you pay for insurance premiums is just written off on line 29 of the 1040. You still have to pay Social Security self employment tax on that money,just not income tax.
 

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