How to shear the cost of your medical insurance.
Here's some good news for budget-conscious entrepreneurs: Last year, Congress voted to accelerate the timeline for business owners to fully deduct their medical insurance by 2003.
But if that seems like too long to wait, you may already be able to deduct 100 percent of your medical insurance, says Bob Sharp, a CPA with Sharp, Thunstrom and Batson, an accounting firm in La Mesa, California. If your spouse works for your company, then you can offer group health insurance, declare yourself a dependent of your spouse and legally deduct 100 percent of your medical insurance expense.
"[This strategy] will work to an advantage before the percentage kicks in to 100 percent," Sharp says. "There will be a crossover point if you take into consideration the cost of payroll taxes and workers' compensation insurance for the spouse."
Be sure to check with your accountant to see if this solution applies to your situation.