Planning for Insurance
1.Do remember to include insurance as a deduction for your vehicle on your federal tax return: If one uses their car for business purposes and chooses to deduct their actual expenses instead of their mileage (only one can be chosen), besides deducting depreciation, gas, oil, tires, licenses, repairs and the related, the insurance premiums may also be deductible. Remember, if one chooses to take the actual expenses deduction instead of the mileage deduction they cannot choose the mileage deduction in later returns.
2.Do deduct your health and long-term care insurance premiums on your federal tax return: A self-employed person may be able to deduct 100% of health and long-term medical costs for themselves, their spouse, and their dependants. When doing your tax preparation be aware that this deduction is taken as an adjustment to income and it can only be taken if the self-employed person or spouse are not covered by an employer health insurance plan.
3.Do see if you qualify to deduct medical expenses on your federal tax return: Depending on one’s income, certain medical expenses including health insurance and dental insurance premiums along with some amounts paid for long-term care insurance contracts may be deductible. This deduction is limited to costs over 7.5% of one’s income.
4.Do plan your medical procedures and expenses for the maximum deduction: Since certain medical expenses are limited to costs over 7.5% of one’s income, when doing your tax preparation don’t forget to schedule and pay for procedures before December 31 of the tax year the deduction is desired may be beneficial to certain persons.
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