A.G. Kalman wrote:

- quote -

I just thought something else which may bear on the issue,
and that is that Medicare B ($938 last year, and even more
this year!) is totally elective. Someone drawing social
security benefits is not required to take it.

So I can see the owner's plan establishing for instance that
medical insurance will include (a) Medicate part B for
those qualified, and (b) another policy e.g. Blue Cross
"gap" coverage.

I know that if it weren't for my wife's most excellent Blue
Cross (regular) covereage, that is what I would use. As
it is, her policy is quite adequate for all our needs.

ChEAr$,
Harlan Lunsford, EA n LA

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Paul Thomas, CPA wrote:
- quote -

I think he's talking about the Medicare B premiums that are
normally deducted from Social Security benefit payments, or
paid directly if you choose not to receive SS benefits.

FWIW, Turbotax help screen states yes, Medicare B premiums
can be deducted for SE health insurance.

-Mark Bole

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A.G. Kalman wrote:
- quote -

I should be more clear on some of my responses. The issue
of medicare premiums being deductible above the line, has
not to my knowledge ever been addressed via IRS guidance or
a court case. Therefore, my reply is my opinion based on my
knowledge of the issues. The requirement is that the
business owner establish a plan under his/her business.
There is nothing in the primary or secondary sources of tax
law that defines the word "plan" for this purpose.
Therefore, I look to the every day usage of that word. A
plan built around the usage of Medicare Part A, B and now D
with any form of supplemental medical insurance plus dental
established under the business should suffice.

P.S. The original link I posted to the ILM will not work.
Use this: http://www.irs.gov/pub/irs-wd/0524001.pdf

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There are no guidelines so you won't get a firm answer or
cite to prove the point, but consider that your "plan" that
you estabished under your business was to pay whatever
health insurance premiums paid for whatever health insurance
you could get for you and your family. Being over 65 and a
sole propriator you can't get any private health insurance
and your business can't get a group health policy. All you
can get is Medicare and Suplement so that's what you deduct.
I've been doing it for 12 years.

ed

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cpabakem01[at]yahoo.com wrote:

- quote -

Milt, my answer would be that the worksheet states that the
health insurance *be established *under your business * for
yourself, spouse and dependents. Medicare was *not*
established *under your business*.

Missy Doyle

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cpabakem01[at]yahoo.com wrote:

- quote -

I haven't seen any guidance from the IRS that specifically
defines the process for "establishing the plan" under the
business. I have always recommended a simple memo to file
that spells out the plan and the business under which the
plan is established. The plan can certainly include the use
of medicare Part B and Part D coverage.

For more information on how the IRS views Section 162(l)
see ILM 200524001 (http://surl.co.uk/?2680)

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<cpabakem01[at]yahoo.com> wrote

- quote -

No, you can not deduct the Medicare portion of the SE tax as
"self-employed health insurance".

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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Does anybody out there have any experience or case law in
deducting Medicare premiums for self-employed health
insurance deduction ?.The IRS says in Pub 535 and the
worksheet of the 1040 instructions (page 30) that it has to
be "established in the business".I cannot see how Medicare
premiums could be that, but welcome all comments. This has
been an argument that has gone on for years, but I cannot
find an IRS definition of "established in the business"

Milt Baker

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