Does the health policy have to be under the name of a business? A lot of sole proprietors do not have a business name or say they just use their own name as their business name. For example, can a truck driver who receives a Form 1099-MISC from a trucking company and files a Schedule C every year deduct his family health premium as self-employed health insurance?
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Yes, as long as he fulfills the income requirement.
Maribeth -
That's what I thought because it is really unreasonable to disallow the deduction simply because a sole proprietor does not have a business name.
But in Pub 17, they also said 'the insurance plan must be established under your trade or business..." It seems to me the requirement is more strict than we think. Do you agree?Comment
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Established under trade or business
Anything a sole proprietor establishes would be under his name which is the same thing as under his trade or business. If it were something like a continuation of a plan from a former employer or under his spouse's employer, etc., that would be what I would consider as NOT under his trade or business. I don't think the law was designed to force you to adopt an assumed name for your business.Comment
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There was actually some guidelines from the IRS, maybe 1-2 years ago, that explicitly said that the personal name is fine. I believe this to be true even for single-owner S-Corp. I do not have citations but am sure you will find it even on this message board.Comment
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For purposes of IRC 162(1)(2)(A):
"A sole proprietor can meet this requirement by purchasing the health insurance coverage under his or her personal name." IRS Letter Ruling 200524001.Comment
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Thank you very much to everyone.Comment
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