Discussion:Health Insurance decreasing SE taxes

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Basic Tax Questions --> Health Insurance decreasing SE taxes


Discussion Forum Index --> Tax Questions --> Health Insurance decreasing SE taxes



ANNE1 (talk|edits) said:

20 September 2010

Under the new law that will allow Sch C filers to deduct their health insurance premiums on Sch C, will this also apply to 1065 partners? And if so, will this be a seperately stated item on the K-1, UPE, or what!

Death&Taxes (talk|edits) said:

20 September 2010
As of the 17th this provision is not law yet but goes to the House, at least according to my Checkpoint daily bulletin. More than likely it will pass. This is how it is explained.

"For tax years beginning after Dec. 31, 2009, but before Jan. 1, 2011, when calculating self-employment taxes, the deduction for health insurance costs of a self-employed taxpayer under Code Sec. 162(l) could be taken into account (i.e., could be deducted) in computing net earnings from self-employment."

I suspect that if it passes, this will be another provision where we will wait on tenterhooks every year to see if it is extended.

Kevinh5 (talk|edits) said:

20 September 2010
NAEA reported the same in the EAlert email I received Friday (or was that Thursday night?)

OCNumberz (talk|edits) said:

20 September 2010
So, no longer on Line 29 of the 1040? I hadn't heard that. Good news!  : )

Death&Taxes (talk|edits) said:

20 September 2010
For one year only.....that is what I meant by my comment.

Death&Taxes (talk|edits) said:

20 September 2010
And Line 29 will still be used for the S Corp shareholder and their insurance.

Pink Pearl (talk|edits) said:

20 September 2010
and the cost of Medicaire for the elderly self employed ?

DgR (talk|edits) said:

20 September 2010
Medicare for the elderly self employed. I assume you mean medicare premiums. They do not qualify as self-employed health insurance.

Solomon (talk|edits) said:

20 September 2010
Discussion:Medicare Premiums-Self Employed Health Ins.

Solomon (talk|edits) said:

23 September 2010
"As of the 17th this provision is not law yet but goes to the House..."

Passed House today - supposed to be signed into law Monday.

Actionbsns (talk|edits) said:

24 September 2010
First reaction a huge THUMBS UP!! Our health insurance premiums have been huge. Second reaction, Oh Darn, we won't be having health insuranc premiums anymore since husband got a job with fully paid benefits. Third reaction, Cool, it's only for one year and I qualify for that year!!" Hooray. Finally, I did something right.


Welski (talk|edits) said:

19 April 2011

This is Welski. I have just read several posts regarding UPE for partners. I really appreciated all of the good information.

Now, I want to solve an issue for my clients regarding treatment of health insurance premiums. Currently, the partnership pays for the health insurance premiums for the partner. Each partner uses their preferred carrier. One of the partners has significantly higher premiums than the other. The other partner does not to pay for the difference. The solution seems to be to run the expense through the personal account as a UPE. I don't want run afoul of the Tax Code in treatment of the premiums.

I would appreciate your comments.

Welski

Trillium (talk|edits) said:

19 April 2011
Welski, there's an interesting theoretical discussion that might be on point for your last post: Discussion:Partnership - Net earnings from self employment; also Discussion:Guaranteed Payment- LLC, Medical Insurance could be helpful. You may have read those already in your UPE research, but perhaps not, so I offer them in case they're helpful; they were among others in this search.

Welski (talk|edits) said:

20 April 2011
Trillium,

Here's another question. The partners have met and agree that they want to use UPE to deduct their respective business expenses that they have paid personally. As was mentioned in my previous post, one of the partners has a much higher premium than the other partner. Could each of the partners include their premiums in the UPE calculations. If so, where would the premiums be recorded on the 1040? Also, if the expenses reduce SE, is right that the Health Insurance premiums would also do so? As Mr. Bosco said on one of the discussions, the LLC partnership does not operate the same as the S-Corps. (And even as convoluted as that is, it still seems better than the LLC Partnership!)

To join in on this discussion, you must first log in.
Personal tools