The Internal Revenue Service handed self-employed seniors a surprise tax break for 2010.
If you are a self-employed senior paying Medicare Part B premiums, the IRS just handed you a surprise tax break. Reversing a long-standing rule, the Service now says that self-employed people can deduct their Medicare Part B health insurance premiums – premiums which previously did not qualify for the self-employed health insurance deduction.
Interestingly, there was no “official announcement, revenue ruling, notice or news release from the IRS announcing a change in position,” according to a recent article in The San Francisco Chronicle.
Note that any self-employed person, regardless of age, can deduct the premiums they pay for health insurance, under certain conditions. One of those conditions is that the insurance must be established in the name of the business or the person running the business. 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.
But, the Service has clearly reversed itself. The deduction is taken on Line 29 of the 1040 tax form. It can be taken even if you do not itemize deductions.