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Why Business Owners Are Celebrating Medicare’s Big 5-0

  • 8 September 2015
  • Author: Cari Holbrook
  • Number of views: 3040
Why Business Owners Are Celebrating Medicare’s Big 5-0

This year marks Medicare’s 50th birthday. If you’re a business owner and think that milestone is irrelevant to you, think again. Participating in Medicare can be cost effective. If you’ve paid payroll taxes over the years, you may not need to pay premiums for Medicare Part A at all. But, in order to take full advantage, follow these three steps:

  1. Don’t forget to sign up when the time comes. If you miss your initial enrollment period (usually a couple months before and after your 65th birthday), you won’t be able to enroll until the annual general enrollment period (January 1 through March 31 each year, with coverage not starting until July) or you face late penalty payments that can really add up.
  2. Educate yourself about the program. For a quick guide on the different Medicare Parts (A, B, C and D), click here. And this guide by AARP does a great job of outlining the common questions and answers about Medicare enrollment. For instance, you can qualify even if you didn’t contribute much to Medicare as payroll taxes during your working years. Those “credits” are only for Medicare Part A (and you can always enroll in Part A by paying a premium regardless). Part B (doctors, services, outpatient care and medical equipment) and Part D (prescription drug coverage) are available without credits.
  3. Don’t forget to deduct it on your taxes. Not long ago, it was clarified that self-employed individuals (including partners or S corporation employees) may deduct Medicare premiums from their self-employment income. Quite simply, it was ruled that Medicare premiums (certainly Medicare Part B and D and, in some cases, Part A) qualify as health insurance and should be allowed the same deduction as other health care plans.

Even high net-worth individuals may be able to benefit by participating in Medicare, although the rules become tricky. For more information, read the Social Security Administration’s “Rules for Higher-Income Beneficiaries” or, to discuss your specific situation and how Medicare affects your taxes, contact us.

Image Copyright: paylessimages / 123RF Stock Photo

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