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  1. #1
    Join Date
    Mar 2009
    Posts
    3

    Default Can an Independent Contractor With W2 Get a Health Insurance Deduction

    I am a consultant in the corporate training design field in Illinois. I work as a independent contractor (or subcontractor) for short projects (from a few weeks to a few months in duration) at an hourly rate. I have to pay for my own health insurance and I am free to work for others, so I consider myself self-employed (and have filed a Schedule C in previous years).

    I am paid via either 1099-MISC and/or W2, depending on the payer's preference. In 2008 all my income was paid via W2 (two different payers). Neither W2 form considers me a "statutory employee" (box 13), therefore I can't declare W2 income on my Schedule C, and I didn't have any other income for this business practice, so it appears that my self-employment gross income is zero. If I understand the tax law correctly... since my Sch C income shows no profit, I can't deduct my health insurance premiums.

    Is this correct? If so, it seems unfair to me. Does this situation reflect a paradox or shortcoming in the tax code (e.g. not keeping up with current pay practices for independent contractors)? Or am I misunderstanding something?

    Thanks.

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