Starting Your Business/Keeping Tax Records
What are Business Expenses
Health Insurance Deduction for the Self-Employed
You can deduct 60% of the amount paid during 2000 for medical
insurance and qualified long-term care insurance for yourself and your family if you are
one of the following.
- A self-employed individual.
- A general partner (or a limited partner receiving guaranteed
payments) in a partnership.
- A shareholder owning more than 2% of the outstanding stock of an S
corporation.
You are allowed this deduction whether you paid the premiums
yourself or your partnership or S corporation paid them and you included the premium
amounts in your gross income. Take this deduction on line 28 of Form 1040.
Percentage increases after 2001.
For tax years beginning after 2001, the deductible percentage of
your health insurance premiums gradually increases. The increases are shown in the
following table.
For Tax Years
Beginning in: |
Deductible
Percentage |
1999 through 2001
2002
After 2002 |
60%
70%
100% |
Long-term
Care Insurance
Important References
Publication
535
Business Expenses