TAX SECRET #2 - Writing off family medical expenses

This strategy is a little more complicated but is well worth the extra effort. To use this strategy, first you must hire a spouse or other trusted family member to work for your business; either full-time or part-time status will work. Next, you need to set up and sign a medical reimbursement plan. You may need the advice of an accountant to help you with this. This plan allows any sole proprietor to convert all family out-of-pocket medical expenses into legitimate health practice deductions. Finally, your spouse or family member pays all out-of-pocket medical expenses for the family, keeping receipts and documenting miles driven for medical purposes. At a specified time, your business reimburses your spouse or family member for these expenses and deducts them as a practice expense.

TAX SECRET # I - Full home office write off

The rules allowing a taxpayer to claim the home office deduction have been loosened, beginning January 1,1999. No longer does the home office need to be the ”principal place of business” for the taxpayer. The home office test can now be satisfied if the taxpayer uses the home office for “administration or management activities” and there is no other fixed location in which the taxpayer performs such activities for his or her practice. The home office still must be used exclusively for business purposes to qualify. This will allow more taxpayers, including small business owners who conduct business outside of their office, but use their home to perform administrative tasks, to qualify for the home office deduction.