Self-employed health insurance and Medicare (again!)

[New York Enrolled Agent]

Look at page 29 (lower left column) of the 2010 1040 instructions posted 12/30/10 discussing the SE health insurance deduction.

Medicare Part B premiums can be used to figure the deduction.

Answer to the question or an error by the typist?

What makes this more interesting is that an EA on the Drake message board had downloaded the 1040 instructions on 12/28 and that version said Medicare B premiums cannot be used to figure the deduction.

I tried to attach the 12/28 page 29 but I get an error the amount has exceeded the PDF allowance. In any case, the 12/28 version said "cannot", the 12/30 version says "can".

[Bees Knees]

I tried to attach the 12/28 page 29 but I get an error the amount has exceeded the PDF allowance. In any case, the 12/28 version said "cannot", the 12/30 version says "can".

Interesting. IRS can't make up their mind. Just goes to show how complex and out of control our tax code is, when the people who are supposed to interpret the rules for us keep changing their minds.

[dtlee]

Apparently they want us to ZIP these files.

I have attached the file from 12/28 that was posted on the Drake forum that Frank referenced.

[dtlee]

What makes this more interesting is that an EA on the Drake message board had downloaded the 1040 instructions on 12/28 and that version said Medicare B premiums cannot be used to figure the deduction.

I tried to attach the 12/28 page 29 but I get an error the amount has exceeded the PDF allowance. In any case, the 12/28 version said "cannot", the 12/30 version says "can".

NYEA,

The extended version of the instructions released last week maintains the 12/30 verbiage. It also confirmed the New York and Local Sales Taxes from the preliminary versions so if you printed out my sales tax charts, they are accurate.

[Burke]

Quite interesting. I was just reading an old TAXPRO Journal (Winter 2009) for things I might want to save and ran across an answer to this very question, which says ".............(t)herefore, it is not eligible for a deduction under 162(l). [FSA 3042]. I assume this is a cite. What is "FSA?"

[solomon]

Quite interesting. I was just reading an old TAXPRO Journal (Winter 2009) for things I might want to save and ran across an answer to this very question, which says ".............(t)herefore, it is not eligible for a deduction under 162(l). [FSA 3042]. I assume this is a cite. What is "FSA?"

Field Service Advice - 3042 was issued in 1995. It can not be used for precedent.

[solomon]

From Revenue Ruling 67-360

Amounts paid by an employer as premiums for supplementary medical insurance (Medicare) for his employees are excludable from the gross income of the employees under section 106 of the Internal Revenue Code of 1954.

Would not this apply to the self-employed as well - especially in view of the new 1040 instructions. Seems to me it is more arguable than the non-authoritative sources; namely, the FSA since it is non-precedence and Publication 535.

[dtlee]

Publication 535

I think we were somewhat interested in what Publiction 535 would say.

Here is a snippet from the recent publication:

Medicare premiums you voluntarily pay to obtain insurance that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed a return without using Medicare premiums to figure the deduction, you can file an amended return to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return.

[JG EA]

Oh my goodness. Well this will be an after tax season project. 07's will lose out I'm afraid.