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Author: NechesInvst Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121340  
Subject: healthcare and the IRS Date: 4/17/2003 5:13 PM
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I was directed over here....

It's late to ask this, but I'm curious.

I work for an employer who does not offer health insurance, being the only wage earner, I have a health insurance policy that I have to pay for out of pocket.

Can I deduct any of this cost? Do I have to be self-employeed to do this? And if I do have to be self-employeed, must that job be my major source of income?

Thanks in advance,
Mike
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Author: gurdison Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65084 of 121340
Subject: Re: healthcare and the IRS Date: 4/17/2003 5:30 PM
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<Can I deduct any of this cost?>


A definate Maybe. The problem is that none of it counts at all until you pass the 7.5% of AGI threshold. If you have 100k AGI that means the first 7500 is excluded. If your AGI is lower, it may make more of the expense a deduction for you. If you find that the numbers work out for you, an amended return would be the way to go.


BRG

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65087 of 121340
Subject: Re: healthcare and the IRS Date: 4/17/2003 5:45 PM
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I work for an employer who does not offer health insurance, being the only wage earner, I have a health insurance policy that I have to pay for out of pocket.

Can I deduct any of this cost? Do I have to be self-employeed to do this? And if I do have to be self-employeed, must that job be my major source of income?


As gurdison noted, health insurance premiums are part of your Schedule A itemized deductions.

You may be thinking of the adjustment to income available to the self-employed for health insurance. There are some gray areas yet to be litigated, but the IRS position is that this adjustment is available only for insurance acquired as a part of the self-employment activity.

This comes up for discussion now and again in Usenet's misc.taxes.moderated. You could do a Google search if you're interersted.

Phil

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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65088 of 121340
Subject: Re: healthcare and the IRS Date: 4/17/2003 6:04 PM
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You could start a sole propriatorship business. You would then be able to deduct 100% of the health insurance premiums UP TO the amount of the net income for THAT business (after expenses--that is the bottom line on Schedule C). ed

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Author: torobravo2003 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65194 of 121340
Subject: Re: healthcare and the IRS Date: 4/27/2003 8:11 PM
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I disagree with all of these responses. Look at line 30 on the 1040. 70% of the health insurance premiums are deductible provided your self-income covers at least the amount deducted.

In my case, I am a consultant and most of my earnings are direct w-2-like earnings with no expenses (expenses are covered by the company that hires me on a short-term basis). Therefore, I deduct 70% of my health insurance expenses. I think this is a new provision since this is the first year I have been able to do it, but it may have been in effect last year and I just missed it. But it hasn't been a deduction for a very long time.

My research on the web and a reading of the IRS instructions etc. made me feel comfortable that this is a deductible expense.

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65197 of 121340
Subject: Re: healthcare and the IRS Date: 4/27/2003 11:00 PM
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I disagree with all of these responses. Look at line 30 on the 1040. 70% of the health insurance premiums are deductible provided your self-income covers at least the amount deducted.

In my case, I am a consultant and most of my earnings are direct w-2-like earnings with no expenses (expenses are covered by the company that hires me on a short-term basis). Therefore, I deduct 70% of my health insurance expenses. I think this is a new provision since this is the first year I have been able to do it, but it may have been in effect last year and I just missed it. But it hasn't been a deduction for a very long time.

My research on the web and a reading of the IRS instructions etc. made me feel comfortable that this is a deductible expense.


This is not a new provision (though the percentages have been changing). However, unless you have Schedule C income or are a "more than 2%" shareholder in an S-Corp that pays you wages, you cannot deduct any portion of your health insurance costs on Line 30 of Form 1040. From your post it is not clear if you qualify or not. You claim you receive "W-2 like" earnings. If they are reported on a W-2, you don't qualify. (Since you state you work for companies that hire you, you probably aren't a 2% shareholder in them.) If they are reported to you on a 1099-MISC (or not reported at all because they are less than $600), you should be filing a Schedule C and you do qualify for the Line 30 adjustment.

Ira

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Author: urche Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65200 of 121340
Subject: Re: healthcare and the IRS Date: 4/28/2003 8:21 AM
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Here is a question continuing the thread on deductibility of health care expenses.
What if a jointly filing couple has one person who is self-employed and one who is employed with 60% of health insurance premiums covered. Could the self-employed person claim the remainder, the out of pocket expenses for the family's health insurance, as a deductible business expense. I think the answer is negative, but would appreciate the opinions here.

Urche

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