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Returning Member

Malpractice Tail Insurance Deduction/W2 Earner Questions

I'm currently an employee with a group and receive a W-2, but for years I used to be a 1099-MISC and K-1 receiving contractor and then partner of my own group. Had to pay for my own closing costs/malpractice tail insurance, with the last installment due this year 2019. I will be about to start a side-gig/1099-MISC earning income through a separate business that I have LLC'd, that will earn me about 10% - 20% of my current individual W-2 income (estimated), but probably will not start until 2020. However, I will have $0 (zero) LLC 1099-MISC income this year, or a very nominal amount.


1) Is it better for me to ask for an extension and pay off my Malpractice Tail Insurance during the 2020 year, when I will receive more 1099-MISC income (and potentially have more 1099-MISC related business deductions), in terms of a Schedule A deduction? Or should I aim to pay it off all this 2019 year, since the Tail Insurance amount will likely represent a larger portion of my income (above 2% of my AGI)?

2) Will my total income/AGI (new LLC 1099-MISC + individual W2) impact this decision as well, because of AMT issues?


3) Although I didn't do it this time, if I ever move to a new employer, should I negotiate my Tail Insurance to be paid down by my hypothetical new employer to maximize my deduction, since it ideally could be taken out pre-tax and just count as a deduction in my future salary?


1 Reply
Level 12

Malpractice Tail Insurance Deduction/W2 Earner Questions

See this about the 2% deduction


Make the new employer pay since you can not deduct the insurance.