Serena is a 38-year-old single taxpayer. She operates a small business on the side as a sole proprietor. Her 2021 Schedule C reports net profits of $15,000. Her employer does not offer health insurance. Serena pays health insurance premiums of $7,800 in 2021. Serena also pays long-term care insurance premiums of $600 in 2021. Calculate Serena's self-employed health care deduction.
Serena is a 38-year-old single taxpayer. She operates a small business on the side as a sole proprietor. Her 2021 Schedule C reports net profits of $15,000. Her employer does not offer health insurance. Serena pays health insurance premiums of $7,800 in 2021. Serena also pays long-term care insurance premiums of $600 in 2021. Calculate Serena's self-employed health care deduction.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 5-2
Self-Employed Health Insurance Deduction (LO 5.2)
Serena is a 38-year-old single taxpayer. She operates a small business on the side as a sole
proprietor. Her 2021 Schedule C reports net profits of $15,000. Her employer does not offer health
insurance. Serena pays health insurance premiums of $7,800 in 2021. Serena also pays long-term
care insurance premiums of $600 in 2021.
Calculate Serena's self-employed health care deduction.
390 x
Expert Solution
Step 1
The following condition needs to be satisfied by a self-employed person (Sarena) to claim the health care deductions:
- Sarena should not eligible to participate in the health insurance plan offered by her Employer.
- Sarena can claim maximum deduction up to the income generated by the business. If there is no business income, Sarena cannot claim the deduction.
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