USA Two SE Schedule C's, family HDHP - whose premium? (2014 1040)

Joined
Mar 8, 2015
Messages
1
Reaction score
0
Country
United States
There is a 2010 thread in the archive section of this site (title: 2010 Schedule SE, Health Insurance, two Schedule C's" by member Steve Pope) that references another post but I am unclear where/whether the question was fully answered, and (more importantly) whether the answer is still correct for tax year 2014. Can anyone answer it, providing a source?

I have the same situation: two (married) SE sole prop's (each with no employees), each with a Sched C, shared family HDHP all year, no other insurance.

Since the health insurance premiums for the taxpayer/spouse/dependents/children-to-age-26 are all deductible on the joint 1040 (as long as one of the SE businesses has income greater than the premium) -- not deductible directly on either Sched C -- it in theory should make no difference whose name is listed first on the family medical policy's paperwork, correct? Isn't the order of the names inconsequential/random? (Noting that there is also a 2013 IRS ruling, #201228037, that a spouse's medicare premium can be deducted by a SE person -- wouldn't that only be in the spouse's name? Thus valid covered persons seems more relevant.)

IRS Pub 535 says the policy must be "established in the name of, or considered to be established in the name of the business, or the individual" for a SE sole prop, but does not further define "CONSIDERED TO BE" or "IN THE NAME OF" the individual: if two spouses names are on the family policy, isn't it "in the name of" each, so this condition is satisfied?

In which case, the family could choose which Sched C to associate with the deduction (as long as, obviously, the deduction is only taken once - no double dipping) -- i.e. in a year when one has earnings above the premium amount, and one does not, they would associate it with the one with the higher earnings (since a Sched C with a loss, or earnings below the premium amount, isn't eligible to associate with the deduction).

It seems unrealistic for a family of two SE individuals (with widely varying project-related income) to guess correctly in November, upon signing up for insurance, who might or might not have income the following calendar year. So if whose-name-happens-to-be-listed-first matters -- when every single other requirement is met (and there are many)-- that would seem not to be in the spirit of the regulation.

[As a further more general observation, seems to me that more and more people are being 1099'd not W2'd and this should be clearer/simpler for SE folks whose "business" is basically just listing their income on a different form.]

Please let me know if you can shed some light on this.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top