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IC deduct on taxes for health insurance premiums - mtks

Posted: Dec 04, 2009

I saw on an old post about IC stating they have been able to deduct the cost of their health insurance premiums on their taxes. Is this only if you pay for a private policy not offered by an employer or something? Seems too good to be true. My husband has our health insurance through his employer, so I would assume that would not be a deduction for us? I am just trying to find enough deductions to make IC status worthwhile this year; it is my first year.

Also, I have heard different stories about estimated taxes, some are penalized for not paying them, some are never penalized, and some were told they were not required to submit them the first year but their 2nd year they had to. I will have to consult with a tax preparer too, but I would still like to hear from others about this. I did not pay any estimated taxes but have withheld approximately 15% from my gross to cover SSI and Medicare and a little federal. I guess I will find out if I am cutting myself short. Should have probably made it 20%, but my husband has a lot of taxes withheld, so I am hoping we come out even..

Health insurance premiums can be deducted if you..... - Cheryl B.

[ In Reply To ..]
actually pay them and they are not offered by your employer (like your husband). So no you can't deduct that. In my case my husband's employer did not offer health insurance and I paid for both our premiums so I was able to deduct all of our premiums. My accountant told me to set aside 35-40% for all taxes. You kind of have to see the first year how you come out. Also you can take the home office deduction if you have set aside area just for work. In my case it was a bedroom, so I was able to deduct 14% of our utilities, taxes, etc. Good luck!

Quarterly Taxes - I was penalized for not paying them - spend the $ to get a CPA or equivalent

[ In Reply To ..]
I did not pay my quarterly taxes in 2008, just did not have it to pay, and not only was I hit with a fat tax bill due on 4/15/09, I was indeed penalized for not paying them quarterly. It was not much, like $112 or something, but yeah... they dunned me. Not paying the quarterlies themselves, though, was the big mistake. I now had to come up with one big amount instead of four smaller amounts spread out.

I pay for my own health insurance and I do deduct premiums. I think there is something else you can deduct with health insurance too. Maybe not, I don't do my own taxes.

I pay a CPA to do my taxes so I can get every dime of deduction, benefit, etc. out of my IC status. One room of my house is my dedicated office and that deduction is based on the actual square footage of the room. I am able to deduct office supplies, mileage, computer service & repair, portion of cell phone, some meals out, and other stuff. I don't personally do it, I pay the accountant to do it, and he is worth every dollar for that once a year service. I don't have him keep my books or do anything else during the year. Taxes only.

He also estimates the quarterly taxes for the next year based on past return(s), and makes up four pay tickets with amount and due date (plus addressed envelopes!). I just pay what it says when it is due. The most I have had remaining to pay one year was $187. So he gets it pretty close. Oh, and if I ever get audited, I have him to represent me.

If you can swing it, I would highly advise having a professional prepare your taxes. Ask and make sure they have knowledge about work-at-home, IC status, types of returns.

Or you can research and educate and do it yourself. There is much you can write off as an IC. And yes, it is legal.

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