Question

Farrell is self-employed as a blogger. his net self-employment income was $38,500 this year. his wife, megan, is a school teacher and was eligible all year for a family health insurance policy through her employer. all year, farrell paid $400 per month for his own health insurance. what is the total amount of health insurance premiums that farrell can deduct as an adjustment to income on their tax return?

A. $0
B. $400
C. $2,400
D. $4,800

Answer 1

The total amount of health insurance premiums that farrell can deduct as an adjustment to income on their tax return is $400. The correct option is option C.

The Breakdown

As a self-employed individual, Farrell may be eligible to deduct a portion of his health insurance premiums as an adjustment to income on his tax return. However, the deduction is subject to certain limitations.

In this case, since Megan, Farrell's wife, was eligible for a family health insurance policy through her employer, Farrell cannot deduct the premiums paid for Megan's coverage. He can only deduct the premiums he paid for his own health insurance.

Given that Farrell paid $400 per month for his own health insurance, the total amount of health insurance premiums that he can deduct as an adjustment to income on their tax return is $400.