Self-employed Health Insurance Deduction
If you are self-employed or an S-Corporation shareholder Uncle Sam will allow you to deduct up to 100% of your health insurance premiums directly from your income. To qualify neither you nor your spouse can be eligible to participate in another employer's subsidized health plan. The deduction is limited to the net profit from your Schedule C minus the deductions for one-half of self-employment tax, Keogh, SEP and SIMPLE pension plan contributions. This deduction is not available for taxpayers that are not self-employed.
Actual Expenses of Car
When you use a car for business, you may deduct the mileage expense by using either the standard mileage rate or the actual expenses of maintaining the vehicle. If you take the actual expenses, you can deduct the depreciation, gas, oil, insurance, tires, licenses, repairs, etc. If you choose to take actual expenses, you cannot change to the mileage deduction method. The standard mileage rate this year is 51 cents for miles between January 1 and June 30 and 55.5 cents for miles between July 1 and October 31.
Employ Spouse for Medical Deductions
If you are self-employed consider hiring your spouse and giving your employee-spouse the medical benefits. Benefits not deductible by the owner are often fully deductible by employer for the employee-spouse.
Section 179 Expensing
If you're self-employed, you may deduct the cost of certain qualifying equipment by making a Section 179 expense deduction. This year the section 179 deduction has increased to $500,000.
Home Office Deduction
Home office deductions cannot be more than your earned income. If they are higher, you must carry over the nondeductible expenses to the following year. Form 8829 is used to deduct home office expenses for a