Smithers is a self-employed individual who earns $33,000 per year in self-employment income. Smithers pays $2,100...

Smithers is a self-employed individual who earns $33,000 per year in self-employment income. Smithers pays $2,100 in annual health insurance premiums (not through an exchange) for his own medical care. In each of the following situations, determine the amount of the deductible health insurance premium for Smithers before any AGI limitation.

a. Smithers is single and the self-employment income is his only source of income.

b. Smithers is single, but besides being self-employed, Smithers is also employed part-time by SF Power Corporation. This year Smithers elected not to participate in SF's health plan.

c. Smithers is self-employed and he is also married. Smithers's spouse, Samantha, is employed full-time by SF Power Corporation and is covered by SF’s health plan. Smithers is not eligible to participate in SF's health plan.

d. Smithers is self-employed and he is also married. Smithers's spouse, Samantha, is employed full-time by SF Power Corporation and is covered by SF’s health plan. Smithers elected not to participate in SF’s health plan.

Expert Solution

Solution:-

a. Smithers is single and the self-employment income is his only source of income:-

Smithers can deduct $2,100 either as a deduction for AGI or claim $2,100 as an itemized medical expense

b. Smithers is single, but besides being self-employed, Smithers is also employed part-time by SF Power Corporation. This year Smithers elected not to participate in SF's health plan:-

Smithers can claim only $2,100 as an itemized medical expense. Even though he is self-employed, he is not eligible to deduct the health insurance premiums as a for AGI deduction because he is eligible to participate in his employer's plan.

c. Smithers is self-employed and he is also married. Smithers's spouse, Samantha, is employed full-time by SF Power Corporation and is covered by SF’s health plan. Smithers is not eligible to participate in SF's health plan:-

Smithers can deduct $2,100 either as a deduction for AGI or claim $2,100 as an itemized medical expense.

d. Smithers is self-employed and he is also married. Smithers's spouse, Samantha, is employed full-time by SF Power Corporation and is covered by SF’s health plan. Smithers elected not to participate in SF’s health plan:-

$0.

ekkarill92 answered 1 year ago

25. Robert, who earns income and pays state tax on that income in Arizona, but resides...

25. Robert, who earns income and pays state tax on that income in Arizona, but resides in California, can claim a tax benefit for that tax on the California tax return. The benefit is called what? A. A credit B.A deduction C.An offset D. Gift

A 20-year annuity pays $2,100 per month, and payments are made at the end of each...

A 20-year annuity pays $2,100 per month, and payments are made at the end of each month. If the interest rate is 11 percent compounded monthly for the first ten years, and 7 percent compounded monthly thereafter, what is the present value of the annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Alexander Ryan earns net self employment income of 115,000. he works a second job from which...

Alexander Ryan earns net self employment income of 115,000. he works a second job from which he receives FICA taxable earnings of 44,000. self employment tax?

it does not matter whether an individual is employed or self-employed since he or she can...

it does not matter whether an individual is employed or self-employed since he or she can claim the same expenses under either category as long as the expense was incurred to earn income. Comment of the accuracy of this statement.

Carla earns $100,000 per year now, and pays $20,000 per year on her fixed rate mortgage....

Carla earns $100,000 per year now, and pays $20,000 per year on her fixed rate mortgage. Her income is subject to a COLA clause. If the risk-free rate of interest is 3%, and the expected inflation rate is 2% per year, what is the spending power of her net income in 10 years, expressed in today’s dollars? How would you find the present value of 10 years of Carla’s income without being given an inflation rate or interest rate? HINT:...

(b) Suppose that an individual earns an income of $280. If there is an income maintenance...

(b) Suppose that an individual earns an income of $280. If there is an income maintenance program where the income guarantee is $300 and the benefit reduction rate is 60. What is their level of subsidy? Answer: (c) What is the basis for the backward-bending shape of the labor supply curve and how have neoclassical economists sought to integrate income and substitution effects into the labor supply curve? Answer:

Rita is a self-employed taxpayer who turns 39 years old at the end of the year...

Rita is a self-employed taxpayer who turns 39 years old at the end of the year (2018). In 2018, her net Schedule C income was $288,000. This was her only source of income. This year, Rita is considering setting up a retirement plan. What is the maximum amount Rita may contribute to the self-employed plan in each of the following situations? a. She sets up a SEP IRA. Maximum contribution b. She sets up an individual 401(k). Maximum contribution

Reggie is a self-employed taxpayer who turns 59 years old at the end of the year...

Reggie is a self-employed taxpayer who turns 59 years old at the end of the year (2018). In 2018, his net Schedule C income was $300,000. This was his only source of income. This year, Reggie is considering setting up a retirement plan. What is the maximum amount he may contribute to the self-employed plan in each of the following situations? a. He sets up a SEP IRA. b. He sets up an individual 401(k).

Elvira is a self-employed taxpayer who turns 42 years old at the end of the year...

Elvira is a self-employed taxpayer who turns 42 years old at the end of the year (2019). In 2019, her net Schedule C income was $130,000. This was her only source of income. This year, Elvira is considering setting up a retirement plan. What is the maximum amount Elvira may contribute to the self-employed plan in each of the following situations? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Problem 13-77 Part a a. She...

Hope is a self-employed taxpayer who turns 54 years old at the end of the year...

Hope is a self-employed taxpayer who turns 54 years old at the end of the year (2018). In 2018, her net Schedule C income was $130,000. This was her only source of income. This year, Hope is considering setting up a retirement plan. What is the maximum amount Hope may contribute to the self-employed plan in each of the following situations? a. She sets up a SEP IRA. b. She sets up an individual 401(k).

Question