1. George has $71,300 in salary from his full-time position and $43,000 in net income in 2011 from his sole proprietorship. What must he pay for self-employment tax? What portion of this can he...

1. George has $71,300 in salary from his full-time position and $43,000 in net income in 2011 from his sole proprietorship. What must he pay for self-employment tax? What portion of this can he deduct?

2. Luis operates a bakery as a sole proprietorship. He has four bakers whom he employs on a full-time basis and who participate in a company-paid health insurance plan. Luis is also covered by this same plan. The annual premiums are $2,300 per person. The business paid $11,500 for health insurance premiums for 2011. Are these insurance premiums deductible? If they are, where should Luis deduct them on his tax return?