A tax deduction you probably don’t want to miss

In case you’re one of those people who likes to save money on your taxes, there’s a deduction lurking in your 2010 paperwork that Realtors and other independent contractors ought to know about.

If you pay for health insurance, you (should) already know that you can deduct the cost of your premiums from your income tax — that’s on line 29 of the 1040.  But it can also be deducted from the net income you report for Social Security and Medicare self-employment tax.

The place to take this deduction is on line 3 of Schedule SE (self-employment). Here are the IRS’s instructions (sorry I couldn’t give the plain text):

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(Click here to view the full PDF; this section is on page 3.)

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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4 Responses to A tax deduction you probably don’t want to miss

  1. I’ve found working with a CPA who knows real estate agents and their needs; forming an S Corporation; and participating in a Health Care Reimbursement plan for all of the employees of the Corporation, to be a good solid plan for paying the taxes due but not overpaying! We want homebuyers to use a REALTOR (professional) when buying a home and the same can be said for using a CPA (professional) for the business tax portion of your business plan.

  2. Ritu Desai says:

    I am with James, I have a good CPA who understand Real Estate taxes. S Corp or LLC is a must for Realtor to maximize the benefits.

  3. Can I ask how much you all pay for your CPA? With 2 agents, a brokerage for referrals, and a teaching company, I think I’m getting over my head! But I don’t want to spend more than it will help me save on taxes if I just do it myself.

  4. taciz says:

    Health Care Reimbursement plan for all of the employees of the Corporation, to be a good solid plan for paying the taxes due but not overpaying!

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