SELF-EMPLOYMENT DEDUCTIONS

 This self-employment deduction can't be taken by everyone, the taxpayers who do qualify are:

- A self-employed individual with a net profit for the tax year (code Secs. 162(I)(1), 40(C) 

- A partner with the net earning from self-employment (Code Secs. 162(I)(1), 401(C)). 

- An S corporation shareholder who owns more then 2 percent of the outstanding stock of the   S corporation and has wages from the S corporation (Code Secs. 162(I)(5) , 1372 (a)).

 This deduction was developed to place self-employed individuals on a level playing field with the employees, who are allowed to exclude the cost of employer-provided health care cost from gross income on your 1040 tax return.

How do you know if you qualify?

To qualify for the deduction, a shareholder must have wages reported to him by the corporation on Form W-2, Wage and Tax Statement. However, sometimes the deduction will not be available during which such a taxpayer was eligible participate in any employer-subsidized health plan maintained by the employer of the taxpayer, the taxpayers spouse, or the dependent. 

We offer a one on one sit down to help you understand your tax situation and any questions you have. Make an appointment and call 1-800-921-0829

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