If you’re self-employed, do you know how much you can deduct for your health insurance premiums?
If you are self-employed, a partner in a partnership, or an S Corporation shareholder owning more than 2% of the corporation’s stock, and you received wages from that S Corporation, you can deduct 60% of the medical insurance premiums and qualified long-term care insurance premiums for yourself, your spouse, and dependents as an adjustment to income in 2000.
The deduction doesn’t offset the self-employment tax, and you can’t deduct the premium during any month in which you or your spouse is eligible to participate in an employer-paid plan.
However, there is a way to maximize your deduction for both income tax and self-employment tax. If your spouse works for your business, consider having your business provide medical insurance to your employee-spouse. Your spouse in turn could elect to cover you as a dependent. This way, you can potentially convert a 60% deduction into a 100% deduction because your business is able to deduct 100% of the qualified employee benefits that it provides to employees.
Make sure that your business meets strict non-discrimination rules such as providing similar coverage for all eligible employees.
Selling A Home
Did you sell your home and make a profit? Good news: you may not have to report the sale on your tax return!
If you sold your home in 2000, the good news is that you generally don’t need to report the sale on your tax return UNLESS the gain on the sale exceeds $250,000 (or $500,000 if you file a joint return). To qualify for excluding the gain from your home, you (and your spouse, if you’re married and filing a joint return) must generally meet the following two tests:
You owned and used the home as your main home for two years or more during a five-year period ending on the date you sold your home. If you’re filing a joint return, only one spouse needs to meet the ownership part of the requirement.
You haven't sold or exchanged another main home during a two-year period ending on the date you sold your home.