See folks, this is why you should always read the comments in the blog. We’ve been having a discussion about whether Medicare Part B is deductible as a self employed health insurance premium in the comments at this post: The A, B, C and Ds of Medicare.
The old Pub 535 said no. And the old instructions for the form 1040 said no. This year, the instructions for the 1040 said yes. And there is no updated Pub 535. So, which is correct?
In 2010, self-employed people may deduct their Medicare Part B health insurance premiums.
The IRS did not announce the change and I can’t find it anywhere on the IRS web site except on the form 1040 instructions. However, it’s been confirmed all over the place, including, apparently by the IRS to Bloomberg, as reported by Insurance & Financial Advisor. A similar report was posted by SFGate, also quoting IRS sources and noting that:
The IRS has long held that Medicare premiums are not eligible for the deduction because Medicare cannot be established by a taxpayer under a business.
This year, it’s different. Nobody knows why the change happened, where it’s been recorded (it wasn’t in the new tax law) or why the IRS has been so slow to get the word out. Mind boggling.