jgcpa
Level 4

Husband's self employment income is above the ceiling for Soc Sec tax. Wife's income is much lower. Proseries calculates the % to multiply health premiums based on a pro rata share of her business to ALL business from both spouses and Sch 1, line 14 SE tax from both spouses.Because his  SE tax is capped and hers is not, the SE tax allocated to the wife is $469 for purposes of the SEHID worksheet, even though her 1/2 of SE tax is $529. The SE tax allocated on the SEHID worksheet is less than the true 1/2 SE tax by $60, allowing $60 more to SEHI deduction to the wife than had the formula reported the $529 that is her portion of the 1/2 SE tax. The excess $60 SEHI deduction also has created a negative QBI by $60, which otherwise would be 0. 

Lacerte allocates the SE tax for calculation of allowed health insurance deduction based on the $529, not the $469.  Proseries tax is $14 less due to this ( and NIIT tax which is affected by MAGI. 

Proseries does use the worksheet in the Pub, but Lacerte uses each spouse's 1/2 SE tax to limit the SEHID, not a % of All sch C (both H and W). Because his net earnings are capped for SE tax, the % method is skewed.

Proseries says their program is working correctly. I am concerned that Lacerte and Proseries do not arrive at the same SEHID. 

Could both methods be correct even though the the SEHID are not the same.?

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