If you operate as a partnership, a proprietorship, a C corporation, or an S corporation, you’re undoubtedly aware of an unpleasant fact.
A lot of money can be added through Premiums for Medicare health insurance. This is especially true if you earn a high income, you’re married, and both you and your spouse are paying premiums.
But hang on for a second. If you know how to play the game (and we do!), those Medicare premiums can potentially lower your tax bill! By how much? It all depends on where you deduct the premiums. We’ll tell you three ways first the best, second best, and third best way to save money.
Our fact-filled article can help you in three ways:
The best way to save money.
You get the biggest buck of benefit from your Medicare and supplemental insurance premiums when you can withhold them as a pure business deduction.
The second-best way to save money.
If you’re self-starting as a partner, LLC member (treated as a partner for tax purposes), sole proprietor, LLC member (treated as a sole proprietor for tax purposes), or S corporation shareholder-employee, here’s some good news. You may be able to entitlement an above-the-line deduction for your health insurance premiums, including Medicare premiums.
The third-best way to save money.
As a business owner who falls into the self-starting health-insurance deduction category, you could have your Medicare premiums end up as itemized deductions if two conditions are met.