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The instructions for form 1040 now say that Medicare part B premiums CAN be used as self employed health insurance. And I've seen an e-mail from an IRS employee that says Pub 535 will be updated in March (for the 2010 year - nothing quite like timely work) to reflect this change in position.

I'm catching up with e-mails that piled up while I was on vacation and have come across a discussion on a Yahoo mailing list. I've seen what I assume is the same e-mail that you reference. One thing I haven't seen yet is anything remotely resembling a reason for IRS's change in position. Have you seen anything? There was a reference to the health care legislation in that IRS e-mail, but it had to do with children under age 27, which didn't make a lot of sense in the context of the specific question.

Going back to OP's situation, I don't know that I'd rely too much on this since OP doesn't have any insurance established for the Schedule C business. (OP is covered by his wife's employer-sponsored insurance.) We all know I'm more conservative than you on these things, but what are your thoughts about that specific issue?

Rule Your Retirement Home Fool
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