Question

shanika is a self-employed hair stylist and had net earnings from self-employment of $4,100. she paid $375 per month for health insurance over the last year. shanika is entitled to a for agi deduction for health insurance premiums of:

Answer 1

Shanika is entitled to a $4,192.5 or $4,100 AGI deduction for health insurance premiums, whichever is lower.

Gross revenue a gross income with less adjustments is referred to as adjusted gross income. Your gross income includes all of your earnings, including wages, bonuses, interest, capital gains, retirement benefits, and other types of income.

Mortgage interest payments, property maintenance, insurance, letting agency fees, and a deduction equal to 10% of your total rental revenue for depreciation are all examples of allowable deductions.

Adjusted Gross Income = $ 4,100

7.5% of AGI = $ 4,100 × 7.5%

= $ 307.5

Total health insurance premium = $ 375 × 12

= $ 4,500

Allowable deduction = $4,500 - $307.5

= $4,192.5 or $4,100 whichever is lower

To learn more about Gross Income

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