Husband is self-employed. Private Health Insurance is in the Wife's name. Premiums were paid out of a joint account. In Lasser's Tax Guide page 306, it states that premiums paid to Medicare for a spouse or children qualifies for SE Health. Medicare is always in the name of the person being insured. Given this should I be treating the health insurance in this client's case as SE Health?
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I would. However, I would also give the taxpayer the solid 'disclaimer' that it is a gray area.
Before the IRS Memorandum declared that Medicare qualified, the answer most tax preparers would say is "No, it needs to be in the name of the self-employed person". However, it now seems to be a gray area. Based on that Memorandum I would deduct it as the SEHI deduction.
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So you would include the wifes portion of medicare for this deduction? something I hesitate about doing.Comment
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On first review
My interpretation is that in this case "the husband" does not own a health insurance policy, therefore no SEHI adjustment related to his Schedule C activity.Originally posted by Kram BergGold View Post
The Lasser "facts" may need further reading also. The word "for" is troublesome. Obviously the husband cannot deduct his spouse's Medicare B premiums, which were most likely deducted from the wife's Social Security benefits.
The previous SEHI discussions on this board have been frequent and mind-boggling. Good luck to figuring this one out. . .
FEComment
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Why not?Originally posted by FEDUKE404 View Post
"all Medicare premiums are similar to other health insurance premiums and can be used to compute the deduction under section 162(l). This rule also extends to Medicare premiums for coverage of a self-employed individual’s spouse, dependent, or child"
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Why not deduct spouse's Medicare B premiums as SEHI ?
I wish someone would put that 2012 memo out of its misery. It's been posted here more times than Hillary has denied her emails.
From prior discussions on this topic, most folks have agreed that a person who is the owner of a Schedule C cannot deduct the spouse's Medicare B premiums because. . .well, because the spouse PAID those premiums and the owner of the Schedule C did not. This situation differs from that of the owner of the Schedule C actually paying for a single policy that covers his spouse and possible dependents.
You can get creative, perhaps, if you want to go the S-corp route and have the corporation pay (reimburse??) the spouse's Medicare B premiums, but I think there was some discussion that said spouse would then have additional income of her own to declare.
Since we cannot post links, I'm not going to chase that rabbit any more here. The TTB search function should find the numerous old discussions on the SEHI topic.
I am content in excluding a spouse's Medicare B premiums from the allowable SEHI adjustments for the other spouse who actually owns the Schedule C. I see that as a justifiable position. You are certainly welcome to interpret the rules in any way you wish.
Best.
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