Starting Your Business/Keeping Records
What are Business Expenses
Health Insurance Deduction for the Self-Employed

You can deduct 60% of the amount paid during 1999 for medicalinsurance and qualified long-term care insurance for yourself and your family if you areone 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 premiumsyourself or your partnership or S corporation paid them and you included the premiumamounts 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 ofyour health insurance premiums gradually increases. The increases are shown in thefollowing table.

Long-term CareInsurance

Important References

Publication 535             Business Expenses