In: Accounting
Minister B pays SE tax on her wage income although she is treated as an employee under the common-law rules. She is paid a base salary and receives a housing allowance. Where does Minister B deduct her health insurance costs?
A. | Page 1 of Form 1040 | ||
B. | Schedule A of Form 1040 | ||
C. | Schedule C of Form 1040 | ||
D. | Health insurance costs are not deductible by Minister B |
Solution: Page 1 of Form 1040
Explanation: If Minister B is a common law employee can claim health insurance deduction on page 1 of Form 1040. This deduction treatment unlike an itemized deduction, is beneficial as it lowers the adjusted gross income (AGI).