Income Tax

As we all know, income may be earned in a number of ways. Some individuals, for example, earn a living while acting as their “own boss” (an entrepreneur, perhaps), operating small family businesses (restaurant owners), or by working as independent contractors (plumbers). These “self-employed” persons, of course, are still required to pay taxes on earnings. […]

As previously discussed, a self-employment tax is imposed upon taxpayers the IRS deems “self-employed.” This often includes small business owners, entrepreneurs, and independent contractors. The good news, however, is that half of one’s self-employment tax is deductible! Claiming the self-employment tax deduction is rather simple; a taxpayer need only reference the Schedule SE he/she completed […]

Taxpayers with self-employment income (and, thus, self-employment tax liability) may take a deduction for health insurance costs1 incurred on behalf of himself/herself, a spouse, and dependents2. This Form 1040, Line 29 deduction is available to taxpayers whose associated insurance plan is established under their “self-employment” business. Additionally, a taxpayer must fit within one of the […]

Self-employed taxpayers, including small business owners and partners, may be entitled to a deduction1 related to particular retirement plans. More specifically, savings incentive match plans for employees2 (SIMPLE) and simplified employee pensions (SEP) are two common plans that qualify under this Form 1040, Line 28 deduction. Additionally, some 401(k) accounts may qualify. Publication 560 provides information […]

Taxpayers making contributions to a traditional IRA in 2013 may be able to take an IRA tax deduction on Line 32 of Form 1040. The initial requirement, though, is that the taxpayer (or taxpayer’s spouse if filing a joint return) must have had some earned income1 to do so. Determining the Deduction Amount: Married couples where […]