From the Minnesota Farmer magazine, February 1995:
Can you deduct medical costs?A 1995 Internal Revenue Service (IRS) ruling allows a farmer who employs his or her spouse to deduct insurance premiums as a business expense, says David Sogge, president of Sogge Tax Service, Glyndon, Minn.
However, to meet the IRS code, you must formally employ your spouse on the farm and offer a total wage, salary and benefit compensation package, Sogge cautions. Qualified premiums are exempt from federal, state, Social Security or Medicare taxes, he adds. Health, dental and vision insurance programs, plus out-of-pocket medical costs, are all eligible for deductions. In addition, your spouse's insurance can be used to cover family dependents, including yourself.
Depending on your tax rate, savings of 30 to 50 percent are possible. "If your spouse works on the farm, it makes sense to take advantage of the tax savings," Sogge notes. For more information, contact Sogge Tax Service at RR 2, Box 274, Glyndon, MN 56547-9671, or call 1-800-484-9582, plus access code 1040.
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