SEHI gray zone - thoughts?

[FEDUKE404]

Person paid $x premiums per month for qualifying medical coverage for all 12 months of 2016 (nothing in Marketplace).

For first six months of 2016, worked as an employee for a firm with no available medical insurance (for newer employees). For last six months of 2016, work is reported on Schedule C.

Client meets all other requirements (entire year) for the SEHI maze, and net income from Schedule C exceeds premiums paid for 12 months and for 6 months.

QUESTION: For purposes of SEHI amounts, can client use 6 x $x monthly premiums, or 12 x $x monthly premiums ?

I'm leaning very heavily toward 12, but worried about the "logic" of such. . .if that phrase is even applicable.

Thanks for clearing any "April cobwebs" from my head!

FE

[DonB]

I have a similar situation and in my reading, I find nothing saying to allocate health insurance cost to period of self employment. It just says without regard to the time self employed, if you are self employed, deduct SEHI as an adjustment. Logic says to allocate, but since when do tax regulations require logic? There are instances where the code tells us to allocate certain business deductions. What does silence tell us?

[FEDUKE404]

Aggressive on the SEHI

I have a similar situation and in my reading, I find nothing saying to allocate health insurance cost to period of self employment. It just says without regard to the time self employed, if you are self employed, deduct SEHI as an adjustment. Logic says to allocate, but since when do tax regulations require logic? There are instances where the code tells us to allocate certain business deductions. What does silence tell us?

. . .that I will probably show 12x the monthly premiums for the SEHI total !!

Thanks for the input. (Glad to know I'm not alone in this ~confusion!!)

FE

[Kram BergGold]

Plan

I mentioned this post another tax pro. He said SE Health Insurance is deducted under a "Plan". How can there be a plan before you are in business. A solid point, I think.

[FEDUKE404]

Searching for "a plan"

I mentioned this post another tax pro. He said SE Health Insurance is deducted under a "Plan". How can there be a plan before you are in business. A solid point, I think.

Taxpayer paid into "a plan" for all 12 months of 2016. Some of those months person was an employee (Form W-2) of a firm that offered no insurance coverage. The remainder of those months person was self-employed under visage of a Form 1099-MISC.

Nothing about "the plan" changed except the employment scenario.

FE

[Gretel]

I agree with Kram. What the IRS sees as plan might not have anything to do with the actual plan.

[DonB]

I'm changing my mind on this. One does not have business deductions before going into business. Allocate--- I would do the same for Office in Home.

[Burke]

I agree with that logic. Note that it says "the plan must be established under your business." But then again, it allows Medicare premiums which are obviously not "established under your business."

[DonB]

I agree with that logic. Note that it says "the plan must be established under your business." But then again, it allows Medicare premiums which are obviously not "established under your business."

They are full on contradictions-- "the plan MUST be established under your business." and then they say it can be in your name!! and then they say it can include your spouse's plan---

[TAXNJ]

They are full on contradictions-- "the plan MUST be established under your business." and then they say it can be in your name!! and then they say it can include your spouse's plan---

Think it still holds that?:

For SEHI Medicare premiums the deduction is not allowed for amounts during a month in which the taxpayer is eligible to participate in any subsidized health plan maintained by an employer of the taxpayer or of the spouse of the taxpayer.