I believe this is ok. Spoiuse works in Taxpayers Schedule C business. There are no other employees. Spouse turns 65 and chooses to go on Medicare. The Taxpayer's business ahd always provided health insurance for the spouse. As this is a small business I believe it can reimburse the Spouse for the cost of Medicare without an excise tax penalty, correct?
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I THINK you are correct. I haven't found anything that would indicate that the sole proprietor SEHI deduction would be considered a second "reimbursement" to an "employee" (but reimbursements from a partnership to partners DOES count as a reimbursement to "employees").
The other possible option would be to use it all as a SEHI deduction.
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