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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Experience:  10 years experience
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I have sole proprietor business. I deduct my health care

Customer Question

I have sole proprietor business. I deduct my health care premiums as a tax deduction and at one time was able to deduct my spouse's premium. Now my tax preparer tells me that I can no longer deduct my spouse - gave me a copy of irs infor but I understand it to mean I can still deduct my husbands health costs but only children under age of 27. He tells me my spouse would have to be under age 27? Doesn't make sense to me..
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

Per IRS publication 334:

Self-employed health insurance deduction. You may be able to deduct the amount you paid for medical and dental insurance and qualified long-term care insurance for you and your family.

Is your premium more than your profit from your business? Is your spouse covered under employer sponsored plan at work or is he eligible for one? Does the insurance plan cover both of you or you have a separate policy?

Customer: replied 1 year ago.
He is retired and I also collect social security. I deduct my Medicare deductions but am told I can no longer deduct his - this has been for the past 2 years. I think my CPA is reading the answer incorectly.t
Customer: replied 1 year ago.
No my deduction for health care is not greater than my profit/
Customer: replied 1 year ago.
where are you?
Expert:  emc011075 replied 1 year ago.

I am here. Give me few minutes.

Expert:  emc011075 replied 1 year ago.

Medicare premiums must be under the name of the sole proprietor, which means you can only deduct your own because your plan doesn't cover his premium. But if you have supplemental plan in addition to Medicare that covers both, you can deduct it.

Customer: replied 1 year ago.
what publication covers this information. We both have medicare - where does it stipulate he has to be under 27 years of age?
Customer: replied 1 year ago.
Medicare premiums cannot be under the sole proprietor - each individual has their own medicare plan. I have Security Blue
and he has Blue Cross through his Pension plan which is deducted each month (retired school teacher).
Expert:  emc011075 replied 1 year ago.

The premiums must be paid by the sole proprietor or the business. If the premium are paid through his pension plan, it is not paid by you or your business or your plan. That's the reason why the premium is not deductible. Another reason is the eligibility. If you spouse is eligible for employer/state/government sponsored plan, the premiums are also not deductible.

The only premiums you can deduct are premiums you pay yourself for yourself and your family and dependents. You do not pay his Medicare or insurance through his pensions.

Expert:  emc011075 replied 1 year ago.

To deduct the premium, the policy must be under the sole proprietor's name or his business. The policy can cover the spouse but cannot be under spouse's name.