Hallelujah!

Form 1040 (Schedule SE)

Line 3 (Short of Long Schedule SE)

For 2010, you can reduce your net self-employment income by the amount of your self-employed health insurance deduction entered on line 29 of Form 1040....

I thoroughly appreciated it years ago when the tax laws changed to allow self-employed people to deduct the cost of health insurance from our income. It took a few years for the deduction to reach 100% at both the federal and state level, but it's been there for quite a while now.

There's only been one problem -- the deduction goes on Form 1040, so I've been paying self-employment taxes on the cost of my health insurance since 1990. "Self-employment tax" as in the full Social Security tax, not the 50% of the tax that employed people pay while their employers pay the other half, the whole "multiply net profit from Schedule C by .9235 then multiply the result by .153 and send us the money" tax.

Yes, I've always been saved from paying income taxes on half of my self-employment tax, but paying what works out to be 14.13% tax on health insurance premiums that cost considerably more than employed folks pay for their insurance has been a harsh "gotcha."

It's apparently just a one year provision, part of the Small Business Jobs Act of 2010. Who knows what next year will bring. But for this year? Wow. It's making a considerable difference in my current financial situation.

Why, yes, as it just so happens, I am working on my taxes. 'Cause I knew you'd never guess....

My perverse day

Congress didn't shut down the government last night, and I finished calculating my taxes. So what am I doing today? I'm going to watch Paul Revere be captured by the British. Well, a reenactment of that small piece of American Revolutionary History, to be precise.

It's happening in lesliet_ma's back yard. Well, not exactly, but if Congress had shut down the government, the reenactors were ready to move from Minute Man National Historic Site to the Lincoln Town Center:

... like the colonists who fought back and eventually routed the British 236 years ago, the history buffs who prepare annually for the region’s Patriots Day activities were already mobilizing to outflank the quarreling members of Congress.

"In Lincoln, Captain Stephen McCarthy of the Lincoln Minute Men said the group would play their commemoration of the capture of Paul Revere by ear tomorrow afternoon. If the park is open, the 3 p.m. event will go off as scheduled at the site along Route 2A where his famed ride ended.

‘‘We are not canceling. We are reconfiguring. If the park is closed, we will direct people to Lincoln Town Center, to Bemis Hall,’’ McCarthy said. ‘‘There is a cemetery across the street there with Revolutionary War soldiers buried in it. It really isn’t that far away, just a 10 minute drive.’’

It really does seem like I should be dumping tea in the harbor instead. Especially since Massachusetts figuratively did so a few months after I moved here:

"As a general rule, Massachusetts will not adopt any federal tax law changes incorporated into the Internal
Revenue Code (“Code”) after January 1, 2005." So read the instructions for Form 1 of the Massachusetts Resident Income Tax.

Onward! The regulars are coming out!