# RSI cotisation deuctible as health insurance on US IS 1040



## bissop (Apr 2, 2015)

Hello,

I am set up a sole proprietorship in France (profession liberale) and I
am going thru the schedule C. I am wondering on form 1040 for the
cost of health insurance if you can deduct the cost of the mutuelle
and the cost of the RSI...I understand that the other cotisations (CIPAV, URSSAF
(CAF,CSG) are not deductible but I am wondering about the RSI which is the
health insurance. It seems logical to claim it as a deduction but I rather ask to
be sure...

This is for the case where you don't take the Foreign Earned Income Exclusion.

thanks for the help,

Patrick


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## Bevdeforges (Nov 16, 2007)

Ooh, that one is a tricky one.

Would you normally be able to deduct the "payroll taxes" as a "business expense" if your business were set up in the US? (I think not - or at least you'd only be able to deduct the "employer's portion" not the employee's.) As an employee in France, you can't deduct any of the cotisations you pay (the employee's portion) from your gross income. 

I'm going to move this over to the Expat Tax section to see if we can get some help from someone with more experience in this area. Just for reference, the RSI payments referred to are mandatory "payroll taxes" here in France - for health care coverage, retirement and other employee benefits, such as family allocation. The mutuelle is a non-mandatory "top up" health coverage that pays the portion of the health care treatment costs that the national plan doesn't.
Cheers,
Bev


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## bissop (Apr 2, 2015)

Hello,

Yes in the US you can deduct the full cost of health insurance for yourself
and your famility (lots of $$$) as a sole proprietorship 
but here it comes in 2 parts (RSI & mutuelle)... the
other components of the "securite sociale" cotisations are covered
under the "social security agreement" and cannot be deducted.
that is correct (as far I understand it)

side note, to make up for it, you can take advantage of a SEP-IRA and
reduce the taxable income in the US...That does reduce your taxable
income by 25%or so (no quite the equivalent of French social charges
but close).

thanks,
Patrick


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## solost1992 (Apr 2, 2014)

"I understand that the other cotisations (CIPAV, URSSAF
(CAF,CSG) are not deductible".

I have just gone through my schedule C for 2013 and all my social charges were deducted on the 1040, CIPAV, URSSAF, and my mutuel. My 2013 taxes were done by an accountant/lawyer. This year I am doing them myself, hopefully.


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