Question

S is a sole business proprietor who owns a medical expense plan. What % of the cost of the plan may he deduct?

A) 50%
B) 75%
C) 100%
D) 25%

Answer 1

A sole business proprietor may deduct 100% of their medical expense plan cost. This deduction covers the proprietor, their spouse, and dependents, helping mitigate healthcare costs for small business owners.

Step-by-step explanation:

For a sole business proprietor like S who owns a medical expense plan, the percentage of the cost of the plan that can be deducted is 100%. This full deduction is allowed for the cost of medical insurance for self-employed individuals, and it can be taken for policies that cover the sole proprietor, their spouse, and dependents.

The tax deduction helps mitigate the financial burden of healthcare costs. Since these costs can represent a significant expense for small business owners, the ability to deduct the full cost of a medical expense plan is an important benefit.