SEHI adjustment - Flight of the Phoenix edition

[FEDUKE404]

Here we go again. From current Kiplinger newsletter....


Self-employeds can’t deduct their spouses’ Medicare premiums after all, according to an IRS official.
In our Aug. 3 Letter, we reported on guidance issued by IRS that Medicare premiums paid by a self-employed person are included in the deduction for health insurance that’s claimed on the front page of the 1040.
At that time, we checked with the IRS and were told that Medicare premiums paid by a spouse will qualify as well.
Now the Revenue Service is backtracking, telling us that premiums paid by a spouse do not count unless the spouse is self-employed.


Yes, the letter they reference is the infamous Number 201228037, dated May 01, 2012 and viewable here: http://www.irs.gov/pub/irs-wd/1228037.pdf


Perhaps, at some point in time, the IRS will bother to let the rest of us know something "official," which might even include a 2012 version of Publication 535??

(Why do I suddenly hear the distant rustle of numerous Forms 1040X ???.... )

FE

[Burke]

Oh, my aching back. It only makes sense, but somebody needs to get their act together -- as you say.

[Kram BergGold]

My 2 cents

Deducting the spouse's Medicare premiums never made sense to me, so I am less than totally upset at having lost it. The IRS really needs to go public on this issue to eliminate the confusion they have caused.

[FEDUKE404]

Agreed

Deducting the spouse's Medicare premiums never made sense to me, so I am less than totally upset at having lost it. The IRS really needs to go public on this issue to eliminate the confusion they have caused.

I tend to agree with you completely.

Anyone familiar with the underlying insurance/payment requirements for any SEHI adjustment (not even involving the Medicare issue) should have understood the fundamental reasoning behind the most recent decision. At the risk of repeating myself, the other spouse's Medicare premiums were never an expense of the spouse with the Schedule C and also were not PAID by the spouse with the Schedule C. In my book that is a zero for two at bat.

Perhaps some folks got confused over the fact that a self-employed person can consider the premiums for **a** policy that covers the self-employed person/spouse/dependents, but of course each person's Medicare coverage is their own. A different scenario altogether!

But, as you know, there were those on these boards who held the aforementioned ruling as gospel and marched forward into the fray with 1040X paperwork held high!

FE