2010 Schedule SE, Health Insurance, two Schedule C's

You have to look to see who's name the policy is in. If it's in HIS name and she is his dependent then it goes on his part of the return. If the policy is in her name it goes on her part. IF they have separate policies they each get their own premiums.

Gene E. Utterback, EA, RFC, ABA

Thanks, this is logical. (Is there a source for this?) I am not sure the instructions suggest what you suggest however. The wording suggests if a fraction of the premium is "allocable" to one spouse, it is placed on their SE.

Steve

I have no idea where you may be looking that suggest you have to allocate. There is no allocation. If your name is on the policy then it is your business that gets the whole deduction and it is you who gets the SE tax benefit for 2010.

The instructions (page SE-3, instructions for line 3) say "If you and your spouse are taking a deduction for self-employed health insurance on line 29 of a joint form 1040, each of you subtracts on line 3 of your separate schedule SE only the amount attributable to your own premiums."

To me, this seems to read like it should be split. While I understand what your are saying, I am not sure why "name on the policy" should override the substance of what this sentence from the instructions says.

(I would think the "substance over form" rule applies here. which name is on an insurance policy, or listed first on a policy, when it covers a married couple is fairly irrelevant.)

Steve

Answering my own question: Publication 535 uses the "in the name of" wording as a criterion, specifically, if a policy is in either name of the business, or the name of the Schedule C filer, then it is "established under the business" for that Schedule C filer. (Bottom of Page 18 of 2010 Pub 535.)

So in the case like the one at hand it needs to be determined if the policy is in the name of one, the other, or both persons.

Thanks again

Steve

That statement starts with "If you and your spouse are taking a deduction...". This means that you both have your own policies and you both are going to take a deduction. The sentence is only meant to tell you that you can't combine or mix and match the amount paid. I see in another post that you discovered the clarity in Pub 535.

Yes, or it could mean there is one policy, but it is in both persons' names.

Steve