New situation for me. Usually I try to find and use all legitimate business deductions but for one client, it's better for him to have more income.
We are in Florida, which didn't expand Medicaid so client falls into the ACA coverage gap. My client is self employed and his business hasn't done too well the last couple of years (ironically due to his own medical problems.) He doesn't expect business to pick up until later in 2016 if it gets better this year at all.
On his 2015 Schedule C, if I include all income and expense as usual, his income falls under 100% of FPL and he will lose ACA subsidies. However, if I don't utilize all of his expenses, I can get his MAGI to a certain place where he owes a small bit of taxes for 2015, but continues to get substantial PTCs for 2016.
Here's my question. Is it ethical to not claim all business deductions in order to get PTCs? My client is fully involved with this decision making. ALL income is reported, it's on the expense side we are tinkering with. He doesn't expect his income to be substantially different in 2016. If we lived in a state with expanded medicaid, this wouldn't be a problem. Thoughts?