Of course the reason that I shop, if you pay your own health insurance, it can be deducted against your business to the extent that your business is profitable. Thus, if my health insurance costs me $3100 per year, the first $3100 of profit gets wiped out to cover my health insurance. My business, then, can earn up to $3501 profit before I end up with a net profit of over $400 that would start Self Employment Tax liability. But my insurance is only deductible to the extent that my business shows a profit. Any uncovered balances get moved on over as a personal expense on my itemized deductions, where they offer me significantly less tax benefit.
Can someone explain this better for me? I assume a profit is anything in the plus and that is when you can deduct a percentage of your health insurance??