Important Changes for 2002

The following are some of the tax changes for 2002. For information on other changes, see Publication 553, Highlights of 2001 Tax Changes.

New tax credit for employer provided child-care facilities. For tax years beginning after 2001, you can receive a tax credit of 25% of the qualified expenses you paid for employee child care and 10% of qualified expenses you paid for child care resource and referral services. This credit is limited to $150,000 each year. For more information, see Publication 553.

New tax credit for small business pension plan startup costs. For tax years beginning after 2001, if you begin a new qualified defined benefit or defined contribution plan (including a 401(k) plan), SIMPLE plan, or simplified employee pension, you can receive a tax credit of 50% of the first $1,000 of qualified startup costs. For more information, see Publication 553.

Health insurance deduction for the self-employed. For 2002, this deduction is 70% of the amount you paid for medical insurance for yourself and your family. For more information, see Insurance in chapter 8.

Self-employment tax. The maximum net self-employment earnings subject to the social security part of the self-employment tax increases to $84,900 for 2002.

Previous| First | Next

Publication Index | IRS-Forms Main | Home