Tax Question

[wabmester]

I'm almost ready to file my taxes! Woohoo! (Yeah, I know.... but I was waiting for a couple of K-1's to come in.)

I had a little bit of Schedule C income this year -- just a tad over $6000. TaxCut let me take both a full self-employed health insurance deduction ($3700) and contribute a total of $5500 to a deductible IRA for myself and spouse.

Does that seem kosher? Taking over $9000 in deductions on $6000 of income? For some reason, TaxCut thinks it's OK.

 

[wabmester]

Woohoo, again! I decided to call my tax guy, and he says it's kosher! Basically, if you have earned income, you're entitled to a full IRA deduction for yourself. Period.

The combination of spousal IRA deduction, health insurance deductions, and other deductions must balance against profit on Schedule C.

 

[Martha]

Hey, give us at least a half an hour to answer.