pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
"Income" would only be cash received from customers for services provided (in this case, painting lessons). Cash transferred from personal savings to the business would be a capital contribution and not income. Sue should keep good records of how much she received and from whom to support what she declares as income on Sch C.
Sue could deduct HI to the extent of income (after the 50% SE tax deduction) as long as the deduction doesn't result in a loss. Any HI that can;t be used on Sch C could be deducted on Sch A (subject to the 7.5% limitation).
I have discussed this with a CPA here. From what I understand, capital contributions can therefore be used indirectly to buy healthcare insurance. I would like to know if anyone here who has their own business has been able to do this.
You didn't understand my point. Surely capital contributions can provide the cash that is used to pay premiums. However, the objective is to bet a tax benefit from the premiums and if the premiums are to be deductible, they are only deductible to the extent that you have income and capital contributions don't count as income.
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