Question

Medical premium paid for family overseas an eligible expense for single member LLC?

Forum|Forum|4 years ago
October 27, 2021
1 reply
0 views

I own a single-member LLC that paid for my annual medical insurance obtained through CA exchange. From my husband's bank account overseas, during the same year, he consistently paid for full medical coverage for himself and my 2 sons (ages 14 and 15) to his insurance company in Germany. My question is, if my LLC reimbursed my husband for his health insurance premium paid overseas, can that cost be included as a legitimate medical expense in my LLC? My understanding is that single-member LLC can pay for the medical insurance obtained through 3rd party for the entire family. In my own study and research for this topic, I have been trying to find any article that specifically proves me wrong. I look forward to learning from anyone who can help me clarify this. Thank you for your time.

A

anyoneelse

Hello FAL4711,

One item that sticks out to me is that you mention your husband pays the premiums. Is it through his work?

You can only take the deduction for months during which you were not eligible to participate in another employer-sponsored health plan, even if you chose not to participate. In other words, you cannot take the deduction if you were eligible for coverage under an insurance policy provided by your spouse's employer or under a policy provided to you by an employer other than your LLC. Per the IRS "A 2-percent shareholder-employee is eligible for an above-the-line deduction in arriving at Adjusted Gross Income (AGI) for amounts paid during the year for medical care premiums if the medical care coverage was established by the S corporation and the shareholder met the other self-employed medical insurance deduction requirements. If, however, the shareholder or the shareholder's spouse was eligible to participate in any subsidized health care plan, then the shareholder is not entitled to the above-the-line deduction. IRC § 162(l). "

Keep in mind that getting the above the line (before your AGI) treatment also means you can’t deduct the premiums when you calculate your self-employment tax liability.

A good place to start is Deducting Health Insurance Premiums If You're Self-Employed.