Background -
I am working on my daughter's tax return. She is on her own,
another state, in fact, but at 24, still on a family
insurance plan with me.
She has multiple jobs, 6, and as I look at the W2's she
forwarded, I see a 1099-NEC instead for one place she
worked. Looking at pub 1779, which is now 10 years old, has
a description of Independent contractor vs employee, and
there is nothing about the work that should have her as a
1099 contractor. She is not comfortable discussing this with
the company, so I'm moving forward.
I know this income will go on Schedule C (and she'll pay 2X
FICA on this amount), but the one real question I have now -
How much of her health insurance cost can go as an expense
(line 14) against this income? FWIW, the amount is about 25%
of her total income for 2022.
Background -
I am working on my daughter's tax return. She is on her own, another
state, in fact, but at 24, still on a family insurance plan with me.
She has multiple jobs, 6, and as I look at the W2's she forwarded, I see
a 1099-NEC instead for one place she worked. Looking at pub 1779, which
is now 10 years old, has a description of Independent contractor vs
employee, and there is nothing about the work that should have her as a
1099 contractor. She is not comfortable discussing this with the
company, so I'm moving forward.
I know this income will go on Schedule C (and she'll pay 2X FICA on this >amount),
but the one real question I have now - How much of her health
insurance cost can go as an expense (line 14) against this income? FWIW,
the amount is about 25% of her total income for 2022.
Background -
I am working on my daughter's tax return. She is on her own,
another state, in fact, but at 24, still on a family insurance
plan with me. She has multiple jobs, 6, and as I look at the W2's
she forwarded, I see a 1099-NEC instead for one place she worked.
Looking at pub 1779, which is now 10 years old, has a description
of Independent contractor vs employee, and there is nothing about
the work that should have her as a 1099 contractor. She is not
comfortable discussing this with the company, so I'm moving
forward.
I know this income will go on Schedule C (and she'll pay 2X FICA
on this amount), but the one real question I have now - How much
of her health insurance cost can go as an expense (line 14)
against this income? FWIW, the amount is about 25% of her total
income for 2022.
Background -snip
I am working on my daughter's tax return.
I know this income will go on Schedule C (and she'll pay 2X FICA on this amount), but the one real question I have now - How much of her health insurance cost can go as an expense (line 14) against this income? FWIW,
the amount is about 25% of her total income for 2022.
If she's taking the position that she was self employed on the days she
was on that job, and employed on the days she was on the 5 other jobs,
then up to the pro-rated share of that number of days of the year. But
she'd better have business records showing this as I'm assuming she
didn't literally write you a check for her share of the family medical insurance for this period.
Background -
I am working on my daughter's tax return. She is on her own, another state, >in fact, but at 24, still on a family insurance plan with me.
She has multiple jobs, 6, and as I look at the W2's she forwarded, I see a >1099-NEC instead for one place she worked. Looking at pub 1779, which is
now 10 years old, has a description of Independent contractor vs employee, >and there is nothing about the work that should have her as a 1099 >contractor. She is not comfortable discussing this with the company, so I'm >moving forward.
I know this income will go on Schedule C (and she'll pay 2X FICA on this >amount), but the one real question I have now - How much of her health >insurance cost can go as an expense (line 14) against this income? FWIW,
the amount is about 25% of her total income for 2022.
On 2/13/23 11:15 AM, Adam H. Kerman wrote:
If she's taking the position that she was self employed on the days she
was on that job, and employed on the days she was on the 5 other jobs,
then up to the pro-rated share of that number of days of the year. But >>she'd better have business records showing this as I'm assuming she
didn't literally write you a check for her share of the family medical >>insurance for this period.
I just confirmed with her about the 1099. She is a dancer. This is a
part time position teaching class. Apparently, the studio that pays her
acts as third party arranging classes taught at a public school. To be
clear, she shows up at a particular school, and teaches a class, twice a >week. At least this makes sense why they 1099 her.
No, she does not reimburse me for the insurance. For 2022, it would seem
that the fraction of the insurance (at age 24 vs me at 60, I would even >assume 1/2 is her's) and this work only being about 25% of her income,
it's not worth attempting to write it off.
Preparing for 2024 (tax year '24, filing in '25) when she is on her own >insurance, can you give me a hint what records she'd need to keep to
take some insurance deduction? None of the W2 employers are providing
any benefit, and I take it, just pro-rating the 1099 income over total
income is not sufficient?
Thanks for the response.
On Monday, February 13, 2023 at 9:01:44 AM UTC-6, JoeTaxpayer wrote:
Background -snip
I am working on my daughter's tax return.
I know this income will go on Schedule C (and she'll pay 2X FICA on this
amount), but the one real question I have now - How much of her health
insurance cost can go as an expense (line 14) against this income? FWIW,
the amount is about 25% of her total income for 2022.
If eligible for this deduction, so far I think 100% of the health insurance cost
gets reported on her Form 1040, Schedule 1, Line 17.
One requirement for eligibility is that your daughter's "business" has to show a net profit on Schedule C.
I have other questions about who is paying for what here. E.g. if this is
a family insurance plan, then your wife and you technically pay
the premium, right? I presume your daughter is reimbursing you all
for her share. Is it kosher for the daughter to take a deduction for
health insurance for which your wife and you technically paid?
I presume you have already looked into questions like this. I am
just not sure whether there is more that needs to be checked
here before proceeding.
. . .
The plan is just the two of us. (Wife is 65+. Medicare)
No, I haven't been asking her to reimburse me for her share of the premium. >In hindsight, I may have had her track her hours carefully, only it
wasn't until a few weeks ago I saw that one job 1099ed her. She also has
5 W2s.
For the 1099 income, and the potential $200 tax savings (i.e. not much
income from this gig, and 10% tax bracket), I'm not going to bother her
with tracking this. I'll file the required Sch C and move on.
I'll revisit this if her 1099 income goes up, to a level where the
tracking is worth it.
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