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JMReedy
Level 3
February 24, 2023

Self-employed health insurance deduction

  • February 24, 2023
  • 3 replies
  • 13 views

I am working with a new client. I am using her copy of last year's tax file as a guide line as to what has been filed previously. I see in Part II Line 17 Self-employed health insurance deduction a deduction. I see a Self-Employed Health Insurance Deduction Worksheet with the same amount on Line 1. However, I see no supporting documents. Where did the previous tax preparer get this number? The issue is that the client did not pay for insurance nor has she use Marketplace insurance. She has always paid cash or has Medicaid. So is there a deduction that I am not seeing. If so, where and how do I calculate that amount?

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    3 replies

    qbteachmt
    Level 15
    February 24, 2023

    "However, I see no supporting documents. Where did the previous tax preparer get this number? The issue is that the client did not pay for insurance nor has she use Marketplace insurance. She has always paid cash or has Medicaid."

    Which means someone misled or outright lied to someone.

    This is not some generic deduction. It comes from paying medical insurance premiums. Not medical care, not office visits, not dental cleaning, and not an allowance. Medicare parts A and B and C and D and Gap insurance qualify, starting with 2012.

    Don't yell at us; we're volunteers
    dkh
    Level 15
    February 26, 2023

    Sounds like it's a good thing your client has left the previous preparer.

    Is your new client self-employed?  If yes, is there some type of insurance the business paid that the previous preparer mistook as health insurance?   

    JMReedy
    JMReedyAuthor
    Level 3
    February 28, 2023

     I finally discovered the issue. The previous had this form for information that the client filled in for him. There was a one that said, "Hospital, Medical, Dental, Vision, Insurance Premiums". The client had listed $6,294.34. The issue is that he placed that amount as INSURANCE PREMIUMS! Those were medical cost not insurance! I am so happy she has moved to me. He did not advise her to pay quarterly to even cover SE tax! This is a mess I now have to clean up! Thanks for the help!