For 2010, IRS offers eligible Self-Employed, a deduction for Health Insurance payments in calculating the Self Employment Tax!

TaxGuru · #1 (**permalink**) 01-29-2011, 01:04 PM

In 2010, the IRS offers "eligible self-employed individuals, a deduction for the self-employed health insurance to reduce their social security self-employment tax liability in addition to their income tax liability.

Previously, eligible taxpayers could claim this deduction on Form 1040 Line 29. However, in 2010, "eligible taxpayers can also enter this amount on Schedule SE Line 3, thus reducing net earnings from self-employment subject to the 15.3 percent social security self-employment tax."

Per the IRS, "premiums paid for health insurance covering the taxpayer, spouse and dependents generally qualify for this deduction. Premiums paid for coverage of an adult child, under age 27 at the end of the year, for the time period beginning on or after March 30, 2010, also qualify for this deduction, even if the child is not the taxpayer's dependent."

The IRS also states that as in the prior years, "the insurance plan must be set up under the taxpayer's business, and the taxpayer cannot be eligible to participate in an employer-sponsored health plan."

Orson · #2 (**permalink**) 02-01-2011, 02:45 AM

Quote:

Originally Posted by TaxGuru

In 2010, the IRS offers "eligible self-employed individuals, a deduction for the self-employed health insurance to reduce their social security self-employment tax liability in addition to their income tax liability.

Previously, eligible taxpayers could claim this deduction on Form 1040 Line 29. However, in 2010, "eligible taxpayers can also enter this amount on Schedule SE Line 3, thus reducing net earnings from self-employment subject to the 15.3 percent social security self-employment tax."

Per the IRS, "premiums paid for health insurance covering the taxpayer, spouse and dependents generally qualify for this deduction. Premiums paid for coverage of an adult child, under age 27 at the end of the year, for the time period beginning on or after March 30, 2010, also qualify for this deduction, even if the child is not the taxpayer's dependent."

The IRS also states that as in the prior years, "the insurance plan must be set up under the taxpayer's business, and the taxpayer cannot be eligible to participate in an employer-sponsored health plan."

hi guys,,,
A very informational post.I shall say wow to read this post.I have visited many of the forums up till now but i haven't read such a good post on IRS relating to premiums.Hoping some more good posts in the future.