self employed health insurance

[oceanlovin'ea]

Does premiums paid to a health sharing ministry qualify for self employed health insurance deduction on the tax return?

Linda F

[TAXNJ]

See if helps from 2-22-20

https://forum.thetaxbook.com/forum/d...alth-insurance

[TaxGuyBill]

Maybe? I think I would take it.


Last month they released a Proposed Regulation for §1.213-1. That basically says that payments for a Healthcare Sharing Ministry are deductible as Medical Insurance under §213(d)(1)(D).

Although it does NOT specifically mention the Self Employed Health Insurance deduction (§162(l)), it would be extremely logical to now take it based on the new Proposed Regulation of §213 that state it is insurance for purposes of §213. The logic of it is discussed in the preamble, and that same logic would apply to the Self Employed Health Insurance deduction in §162(l).

https://www.govinfo.gov/content/pkg/...2020-12213.pdf

https://www.irs.gov/newsroom/propose...%20the%20Code.

.

[TAXNJ]

Think one should consider if the “proposed” regulations are “finalized” - what tax year do the regulations start?:

Proposed Applicability Date
These regulations are proposed to apply for taxable years that begin on or after the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register.

source: https://www.federalregister.gov/docu...e-arrangements


Also, does the IRS state that one can rely on the “proposed” regulations? what happens if one relies on “proposed” regulations and the regulations do not become “final”

For example, see article below:

A preparer-client decision: Whether to rely on the Sec. 199A proposed or final regulations

https://www.thetaxadviser.com/issues...gulations.html

[TaxGuyBill]

That is a good point, they are only Proposed Regulations and as such as not 'binding'.

However, those are the current thoughts of the IRS/Treasury. If under audit, the auditor will almost always 'give in' if there is any guidance, including Proposed Regulations. If brought to court, maybe not. And in the event it is disagreed with, it is almost certainly a waiver to any penalties.

But as was pointed out, the IRS is not 'bound' to follow "Proposed" Regulations so follow at your own risk. But as I said before, it DOES show the current thought process of the IRS about the matter.