Self-employed health insurance deduction

TP is a self-employed teacher who deals directly with the individual students.

TP has a health insurance policy as an individual subscriber.

Do the premiums qualify for the self-employed health insurance deduction on Form 1040 line 29?

The reason for asking is that the 1040 instructions say, "The insurance plan must be established under your business" (page 30). This seems peculiar to me. It's repeated in Publication 535.

OTOH, immediately afterward Publication 535 says, "For self-employed individuals filing a Schedule C, C-EZ, or F, the policy can be either in the name of the business or in the name of the individual." TP will file C or C-EZ, so this provision apparently overrides the instructions.

Assuming the deduction can be taken, the second question is, "How much can be deducted?"

TP became self-employed August 2009, and uses cash-based accounting, and remains self-employed into 2010.

Premiums were paid during 2009 in March (for Apr-May-Jun), in June (for Jul-Aug-Sep), in September (for Oct-Nov-Dec), and in December (for Jan-Feb-Mar, 2010). My guess is that (a) the premiums covering August-December, 2009 can be reported, and that (b) the December premium would carry over to 2010's return. Is this right?

Reply to
zvkmpw
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"zvkmpw" wrote

The insurance premium is deductible in the year paid, so the December payment, for the first three months of 2010, are 2009 deductions.

Yes, the earlier amount paid should only be for the time she was self-employed forward, so 2/3rds of the payment made in June sounds about right, and all of the September and December payments.

Reply to
paulthomascpa

They have a bizarre rule that if you could be covered by your spouse's plan, even if you chose not to, then your health insurance premiums are not deductible.

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Other coverage. You cannot take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month. This rule is applied separately to plans that provide long-term care insurance and plans that do not provide long-term care insurance. However, any medical insurance payments not deductible on Form 1040, line 29, can be included as medical expenses on Schedule A (Form 1040), Itemized Deductions, if you itemize deductions.

Reply to
removeps-groups

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