My client would like to take the maximum allowed for her simple IRA. She has already made a contribution. However, the SE health insurance deduction is zeroing out form SE. Do you all think the simple deduction is not allowed for her for 2010? Should I not take the health ins deduction so that she might contribute to her simple? Help, please.
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No one has answered so I'll ask for more info. I'm not sure I understand. Are you saying the taxpayer only has C income? Does it show a profit in order to take the IRA? The health insurance is zeroing out the SE tax - that's nice! Why take that away? You also have the health insurance as an adjustment right? Maybe that is zeroing out the profit?JG -
Her only income is Sch C. Spouse has income and they would both like to maximize retirement contributions. She has a simple IRA in place and she has been contributing to it throughout the year. They are both 55+ and concerned about retirement. Would it be better to put the health ins on Sch A so they can use the simple contribution?Comment
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As usual I was overthinking the situation. Thank you for trying to help. I got my answer from the tax book. Thrown for a loop because tp not the usual client for March. They don't mind paying their fair share of taxes.Comment
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TTB, page 13-16:
When you look at line 4 of Schedule SE, it is after subtracting the SE health insurance deduction from line 29 of Form 1040.Self-employed individual. A self-employed individual is treated
as both an employee and the employer of his or her business.
Compensation equals net earnings from self-employment before
subtracting any contributions made to the SIMPLE IRA (line 4,
Section A, Schedule SE, or line 6, Section B, Schedule SE).Comment
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Page 5-10 middle of the second columnComment
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