M/C Premiums

[Bird Legs]

Can Medicare premiums be deducted by self employed person on page 1 of 1040
as an adjustment to income?

[Deltax]

Can Medicare premiums be deducted by self employed person on page 1 of 1040
as an adjustment to income?

No. It has nothing to do with his self employment. It is however deducted on Sch A subject to the 7.5%

[Jiggers]

Jiggers

Suppose that this was the only health insurance policy that the taxpayer was paying for? Why isn't it deductible as self-employed health insurance?

[Black Bart]

Medicare B Premiums

I don't know if or why they are or are not deductible as a SE health insurance adjustment on 1040, but you might give this number a call for the government point of view: 1-202-622-6080 (Office of Chief Counsel - IRS).

I got that off a prehistoric (before TTB on QF board) quote in a discussion between John Vowles and FE Duke. They were kicking around the old "established/not-established under business name" health insurance question and Med B premiums were mentioned.

Duke said he checked a web address -- http://www.irs.gov/pub/irs-wd/0524001.pdf -- and, while the IRS memo stated that policies under individual names were okay, it did not address the Medicare question. He said "The jury is still out on whether any Med B premiums can be considered." But then, another poster (one "Dyne anonymous") chimed in and said "I called this office (referring to the phone number above) and they advised that Medicare B premiums are NOT deductible as (SE) health insurance."

Now; whether or not that (he said she said) can be considered the last word is anybody's guess, but I guess you could call the number and see. If you're lucky enough to get a knowledgeable person (a long shot), then maybe you could decide for yourself if it's the gospel or not.

Good luck.

[Harvey Lucas]

My vote is yes.

Sounds like health insurance to me.

I've been deducting it as health insurance for 15 years now.

If they are self employed, then logic dictates that it can go on the line for SE health insurance deduction.

[jainen]

>>logic dictates<<

>>logic dictates<<

Not that logic plays a big role in the tax code, but I'd be interested in your line of reasoning that leads to Medicare being established under a sole proprietor.

[Chief]

Medicare is not a self-employed health insurance.

Black Bart was on the right track. I remember this discussion before. Deduct it in this manner at your own risk. Bees why dont you clear this matter up?

[Jiggers]

Medicare Premiums

Claudia Hill, well-known seminar speaker has said that it is deductible as self-employed health insurance.

The IRS issued a memo in 1995 (FSA 3042) that states that medicare is a "subsidized" plan, and therefore not deductible as self-employed health insurance. This was posted and discussed in detail around March 22 of this year on the Quickfinder webboard with the full text complements of a poster of this memo. This was their opinion.

Claudia Hill says to deduct and argue if it goes to an audit. The premiums were an insignificant amount before. However, now that self-employed health insurance is 100% deductible and the annual premiums for 2006 are $1,062, this is a significant amount.

That is $159 in taxes for a 15% tax bracket. Times 2 if you are deducting the husband and spouses' medicare!

Why congress or any of the professional organizations (NAEA, NATP, NSTP, CPA, etc) pursue this, who knows?

[Bees Knees]

We've argued this topic before...

See http://www.thetaxbook.com/forums/sho...hlight=Claudia

[Black Bart]

Hmm, well,

guess that's the end of the argument.

Bees says no.
jainen says no.
Armando says yes.
Goldberg says "every man for himself."

IRS says "Drop dead. Our way or the highway."

[OldJack]

guess that's the end of the argument.

Bees says no.
jainen says no.
Armando says yes.
Goldberg says "every man for himself."

IRS says "Drop dead. Our way or the highway."

OldJack also says no. The coverage is not because of self-employment rather old age.

[Jiggers]

But,.......

My self-employed clients drop their regular coverage when they become eligible for medicare! So doesnt' this become their health coverage?

What to do? What to do?

I am surprised that even AARP won't take a stand on this.

[ecb34691]

Why would AARP take a stand on this. They wont even take a stand on raising the limit on the taxablity of SSA. The amount's haven't been raised for inflation like all other parts of the tax code.

[veritas]

Aarp

They don't take a stand because they don't can't get a commission for selling it.

[Black Bart]

Inflation

Why would AARP take a stand on this. They wont even take a stand on raising the limit on the taxablity of SSA. The amount's haven't been raised for inflation like all other parts of the tax code.

You know, that's a very good point. Don't know why, but It had not occurred to me.

In the past, down here in "pore folks" country it didn't really make any difference because retirement benefits weren't much, but now they're up and in the past two weeks I've had three newly retired clients get nailed for 85%. They really weren't expecting it and it knocked them for a loop.