Worker's Comp insurance deducted from independent contractor income

[Burke]

Okay. When you said the employer deducted the amount, I think we all thought you meant he deducted it from the 1099. Apparently, he deducted it from her check only. He reported the gross amt on the 1099 and that is what she needs to put on her Schedule C. Then she DOES get to deduct the amount of W/C on the Sche C as an expense.

You can't really tell what the employer is doing unless you are looking at his tax return. He may have deducted the entire 1099 amt on his business return, OR he could have deducted the actual amt paid to her by check, as well as the W/C which he also paid after deducting it from her check. If he deducted the gross 1099 amt AND the W/C, then he has accounted for it twice and that is not correct.

I don't quite understand the part about the mileage. If he paid her mileage or an expense for travel, and included that amount in the 1099, then yes, she gets to deduct actual mileage at the approved IRS rate, whether or not that was the amount he paid her. I would hate to be his accountant.

[Burke]

This workers comp issue must be quite different from state-to-state.

Maybe so. I will check into it here and see. Note the post from OH.

[ChEAr$]

As I recall such insurance coverage payments are not deductible for a proprietor.
Period.

The fact that the payor has to make certain representations to his insurer shouldn't give credence to a deduction disallowed to all proprietors.

Or does anyone have a citation to the effect that such proprietors CAN take a deduction?

[Burke]

Here is some info for Virginia under the Virginia Workmens Compensation Act:

Employers who regularly employ 3 or more employees whether full or part-time must purchase.
Otherwise, it is voluntary.

Every operator of an underground coal mine must purchase.

Sole proprietors, corporations with only one shareholder, and LLC's with only one member, can elect to be covered.

However, an officer of a corporation is considered an employee under the Act, unless the officer rejects coverage.
A manager of an LLC is treated as an employee under the Act, unless the manager rejects coverage.

An independent contractor who is a licensed real estate agent is expressly exempted. No other mention of independent contractors is in the Act.

[Lion]

[QUOTE=manyhappyreturns;137830] Her employer deducted the WC from the gross that he reported on the 1099QUOTE]

So her client did NOT deduct the WC from the gross that he reported on the 1099? If so, she can deduct it if otherwise eligible. By the way, is this an employer/employee relationship?