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The Tax Deduction Mitt Romney Did Not Take (New York Times)

Wednesday, January 25, 2012

Oddly, there was one strategy that Mr. Romney did not use — a full deduction for health insurance premiums that is available to most self-employed people. It is on Line 29 of the Internal Revenue Service’s Form 1040 income tax return. On Mr. Romney’s return, the line appears blank.

Keith Hall, the national tax adviser to the National Association for the Self-Employed, pointed to a restriction on the deduction. “It is very vague but it basically states that the health policy you have must be established under the small business,” Mr. Hall said. “There’s a reasonable chance that his health insurance is a policy that he’s had for many years — could be coverage that he had while at another company, or otherwise unrelated to his self-employment. If that’s true, he’d be precluded from taking that deduction on Page 1 on his 1040.”

Further, Mr. Hall said, it may not have made financial sense to shift his insurance to take advantage of the deduction. “He may have an old group policy, and depending on what medical conditions he or his family have, to try and convert it may cost more than the savings he’d get from the deduction.” Mr. Romney’s wife, Ann, was diagnosed with multiple sclerosis in 1998.

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