If you're self-employed and receive Medicare, you may be able to deduct all your Medicare insurance premiums, the same as the premiums for any other type of health insurance.
Medicare Part B premiums can reach close to $500 per month, so this deduction can really add up.
The self-employed are permitted to deduct health insurance premiums as an “above the line” deduction, which eliminates the medical expense reduction requirement when you itemize, in which you must first reduce your medical expenses by 7.5% of your adjusted gross income.
You can use this deduction only if you own a business as a sole proprietor, partner in a partnership, limited liability company member, or S corporation shareholder who owns more than 2% of the company stock.
This is a special personal deduction that applies only to your income taxes, not to your self-employment taxes. Moreover, you may deduct only as much as you earn from your business. If your business earns no money or incurs a loss, you get no deduction. If your business is organized as an S corporation, your deduction is limited to the amount of wages you are paid by your corporation.
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