Question

Serena is a 40-year-old single taxpayer. She operates a small business on the side as a sole proprietorship. Her 2018 Schedule C reports net profits of $5,624. Her employer does not offer health insurance. Serena pays health insurance premiums of $7,545 in 2018. Serena also pays long-term care insurance premiums of $600 in 2018.
Calculate Serena’s self-employed health care deduction.


$____________

Answer 1

Answer:

$5,624

Explanation:

Data provided in the question:

Reported schedule C net profits = $5,624

Health insurance premiums paid = $7,545

Long-term care insurance premiums paid = $600

Now,

The total health care premium

= Health insurance premiums paid + Long-term care insurance premiums paid

= $7,545 + $600

= $8,145

But Serena's health care deduction is limited Reported schedule C net profits

Therefore,

Serena’s self-employed health care deduction will be $5,624