A.G. Kalman wrote:
- quote -

Please disregard the last sentence above. I forgot you said you
had maxed out your SS taxes.

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Tim wrote:

- quote -

When you calculate your SE taxes, the form provides for the
$90,000 cut off for SS, however, you pay the full 1.x% for
Medicare on your full income.

- quote -

If your employer offers a subsidized insurance plan you
cannot take the SE Health Insurance deduction.

ed

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Tim <Tim5464[at]yahoo.com> wrote:

- quote -

Yes, the social security part of it can max out, but not
the medicare part (2.9%). The long Schedule SE does all
the necessary arithmetic.

- quote -

You can't include the income adjustment for self-employed
health insurance premiums for any month in which you were
eligible for employer health insurance, even if you did not
enroll in the employer health insurance.

Steve

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Tim wrote:

- quote -

If you look at page 2 of the Form 1040 Schedule SE, you will
see that you only pay social security and medicare taxes
once as an employee. You must still pay the employer half
of those taxes on your SE income.

You probably meant to say that you have been deducting your
health insurance expenses as an adjustment to gross income
(above the line deduction) rather than an itemized deduction
on Schedule A. You can continue to do that to the extent
that your business has a profit and your business plan
states it will provide health insurance for you, your spouse
and dependents if you have any.

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"Tim" <Tim5464[at]yahoo.com> wrote

- quote -

Only on the Social Security portion. Medicare has no wage cap.

- quote -

Yes, if your employer offers it to you.

--
Paul A. Thomas, CPA
Athens, Georgia

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"Tim" <Tim5464[at]yahoo.com> wrote:

- quote -

If your wages exceed the Soc Sec maximum, then all you have
to pay is the Medicare tax on self-employment.

Does your salaried position include health insurance?

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- quote -

You will avoid the Social Security portion (about 12.6%) but
not the Medicare portion. See Form SE.

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Tim wrote:

- quote -

Not quite. There is no income limit for the Medicare tax
(1.45% x 2), so that will still be owed. See Schedule SE and
instructions, it is spelled out there.

- quote -

Yes, as an above the line deduction on page 1 of the 1040
form.

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I have been self employed for the last few years and have
paid a hefty self employment tax along with my income tax.

This year I will have wage income that exceeds the limit for
social security deductions, but I will also have self
employment income. Will I avoid the self employment tax
since my wage deductions cover the social security?

Also, I have been able to deduct my health insurance costs
against the self employment income. Any reason I can't
continue to do that?

Thanks.

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