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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121180  
Subject: Re: health insurance deduction Date: 5/5/2004 9:11 PM
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I seem to fall into a category not clearly defined by the IRS. For 2004 I haven't had any 'odd jobs' and may not take any, meaning I won't be filing a schedule C.

No - it's pretty clear that you would be considered an employee and not self-employed. Therefore, you would not be able to take the "above the line" deduction for health insurance. To take that deduction you have to have self-employment income - typcially on schedules C, E (page 2 only), or F.

My take on it at this point is that the IRS is going to look at me as a part time employee with 2 jobs, even though I set my own schedule and receive no benefits.

Yep.

... but I feel that if I try to take the above line deduction it's going to send up a red flag that I've taken a deduction I don't qualify for

Correct - if you try to take the self-employed health insurance deduction, the IRS will probably make an automated correction and disallow the deduction. If they've programmed their computers to do so, they'd move the deduction to schedule A and give you the benefit there.

Not fair ... ( I should qualify, because I am independent of the businesses). There seems to be no provision for those who can't qualify for health insurance through their employers.

That's something you'll need to take up with your congressional representative. The IRS is just doing what congress passed as law on this one.

--Peter
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