Ask Jason 2/24/12

All of these are actual questions from visitors to this website over the last few weeks:

Q: Can a self-employed person deduct health insurance for same-sex spouse?

A: Yes, if the spouse is your dependent. Otherwise, the answer is no. That’s on the federal return. But also consider the implications on the state tax return. The insurance would probably be deductible on your state return even if it’s not deductible on the federal return. This is a good topic for my Gay Marriage Monday weekly feature. Look for an article soon.

Q: Are unemployment benefits taxable?

A: Yes, taxable in full. One year (2009) the first $2,400 of unemployment benefits were not taxable. But that provision existed for one year only.

Q: What can a nonlicensed daycare provider deduct?

A: In general, you can deduct any legitimate business expenses. The only thing you might not be able to deduct is the home-office deduction. It depends on if you are required to be licensed under state law. If you are NOT required to be licensed, then you can take the home-office deduction. If you ARE required to be licensed but aren’t licensed, then you can’t take the home-office deduction.

Q: What kind of writeoffs are available for daycare operators in Illinois?

A: The same deductions as for daycare operators anywhere. The only deduction that might be different involves depreciation allowances. Right now, Illinois is following along with federal bonus depreciation, but you’ll want to watch in future years. States sometimes have depreciation requirements that differ from federal requirements, which means making adjustments on your state return.

The answers provided in this segment are intended to be general in nature and do not constitute tax advice. Please pay a tax advisor to advise you about your unique situation before making any financial decisions.

Have a tax question? Click here to submit a question. Please note, I cannot personally provide a specific answer to your question by e-mail. (Ask Jason has been discontinued.)