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katrin [286]
3 years ago
10

Green is self-employed as a human resources consultant and reports on the cash basis for income tax purposes. Select the appropr

iate tax treatment on Form 1040 (U.S. Individual Income Tax Return) for personal life insurance premiums paid by Green.
a. Fully deductible on Form 1040 to arrive at adjusted gross income
b. Reported in Schedule A, Itemized Deductions (deductibility subject to threshold of 7.5% of adjusted gross income)
c. Reported in Schedule A, Itemized Deductions (deductibility subject to threshold of 2% of adjusted gross income)
d. Not deductible
Business
1 answer:
Bad White [126]3 years ago
6 0

Answer:

Green (Self-Employed Human Resources Consultant)

The appropriate tax treatment on Form 1040 (U.S. Individual Income Tax Return) for personal life insurance premiums paid by Green is:

d. Not deductible

Explanation:

Green can claim business insurance premiums (regarded as business expenses by the IRS) and healthcare insurance premiums (regarded as medical expenses by the IRS) as deductions, but his personal life insurance premiums are considered as personal expenses.  They are not tax-deductible.  The IRS regards the payments for life insurance premiums as it regards the purchase of any other product or service for personal consumption.

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The main reasons of this outward shift were:

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sleet_krkn [62]

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I hope my answer helps you

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