SE deduction for medicare Pt B

[jimenright]

Since the IRS seems to now agree that Medicare Part B can be used for the above-the- line SE health insurance deduction; does it mean that we can ammend prior year returns to take the deduction? Does this also apply to medicare supplement policies?

[JG EA]

To the top

Good question. I also would like to know that. It wasn't the way it was last year, but does this ruling change prior years?

[taxxcpa]

Ruling

Unless the law itself changed enabling the deduction, it would seem that the new ruling would indicate that the IRS had misinterpreted the law. If so, it would have been misinterpreted in the past, and amended returns would be OK. But I would be afraid to try it until I see more on why the ruling was changed.

ANOTHER QUESTION: How about a retiree whose former employer provides a subsidy to his health insurance;i.e. the retiree has medicare deducted from his SS and also pays $100-per-month for some additional health insurance which would cost $ 500 if it weren't part of the comany's group plan? Would this make him unable to deduct the medicare?

[JON]

Computer input

how do we do it. The input screen shows SS and Part B. If we have a Schedule C do we not put the Part B in and just enter it on the Schedule C. I guess that is the only way to get it above the line.

[jimenright]

The above the line deduction

goes on the 1040 on the lower part of page 1. You are also allowed to deduct it on the schedule SE for the SE tax calculation. My software automatically does the sched SE entry when the 1040 page 1 deduction is entered.

[Burke]

ANOTHER QUESTION: How about a retiree whose former employer provides a subsidy to his health insurance;i.e. the retiree has medicare deducted from his SS and also pays $100-per-month for some additional health insurance which would cost $ 500 if it weren't part of the comany's group plan? Would this make him unable to deduct the medicare?

TTB-5-10 says "Do not include any amt paid for any month or part of a month in which the TP was eligible to participate in a subsidized health plan maintained by the taxpayer's employer or spouse's employer." So I would say yes, he is unable to deduct anything.

[JON]

I do not

think it is a problem. Software has it all on the SSA input page with the social security. To get it to work right you have to avoid putting B on that input form because it takes those amounts to Sch A. You just enter it on the 1040 Sch C input form as health insurance and it works.

[Burke]

I do not think it goes on Sche C. It is an adjustment on SE. And a deduction on 1040. My software has a line input on the SE page for this. Check that out on yours.

[JON]

I

guess we have different software, but both work...

[JenMO]

Does Soc Sec need to be taxable for the Medicare B to be deducted as SE insurance? Or do I just add it to the rest of the SE insurance and put it on the line?

[Burke]

No to the first part, yes to the second.