Self-Employed Health Insurance Deduction

[TCP2591]

I wife and I are retired and receiving Social Security benefits. I am consulting part-time operating as a sole-proprietorship under my name. I understand I may be able to deduct the amount I paid for medical and dental insurance for my spouse and I. I see the IRS states that the "Insurance plan must be established, or considered established, under your business." My wife and I secured our Medicare coverage, Medigap and dental insurance plans prior to my securing business engagements. I have five questions about our using the self-employment health insurance deduction: 1.) What is required for our health and dental insurance plans to be considered established under my business?  2.) Are the Standard Medicare Premiums deducted by SSA deductible? 3.) Is the income-related monthly adjustment amount (IRMAA) deducted by SSA deductible? 4.) Are our Madigap insurance premiums deductable? 5.) What percentage of these premiums are deductible?      

[Bsch4477]

You can consider your insurance coverage established under your business and can deduct all of your and your spouse's premiums paid for all the insurance you mentioned in your post but not greater than your net self employment income.  If you itemize, be sure that the amount used for that deduction is also not used as a medical deduction on Sch A.

[TCP2591]

Thanks for your response. However, I still don’t know whether there are any specific criteria which must be met for the IRS to consider the insurance plan(s) “established under my business” versus otherwise. I have not found an IRS publication, instruction or bulletin, or an online source that provides definitive criteria on this topic. All I can find is what is already in the IRS publications and instructions. IRS agents I have spoken with have not been able to answer my question. All They do is repeat what is already in the IRS publications and instructions.

[VolvoGirl]

For Medicare 

Medicare plan B payments are qualified as Self-employed medical insurance premiums and should be entered under Business instead of in the Social Security Benefits entry area.  So go back and take it off your SSA-1099 entry.

[Bsch4477]

If your name is on the policy you are good to go.