The following items highlight some changes in the tax law for 2002.

Health insurance deduction for the self-employed. For 2002, this deduction is 70% of the amount you pay for health insurance for yourself and your family. See chapter 7.

Meal expense deduction subject to "hours of service" limits. In 2002, this deduction increases to 65% of the reimbursed meals your employees consume while they are subject to the Department of Transportation's "hours of service" limits. See chapter 13.

Retirement plans. Many changes to the tax laws for retirement plans were made by the Economic Growth and Tax Relief Reconciliation Act of 2001 that was enacted on June 7, 2001. However, most of those changes do not take effect until after December 31, 2001, and are not covered in this publication. For information about those changes, see Publication 560, Retirement Plans for Small Business, or Publication 553, Highlights of 2001 Tax Changes.

Maximum clean-fuel vehicle deduction. The maximum deduction clean-fuel vehicle and qualified electric vehicle credit limit are lower for 2002 than they were for 2001. They will be completely phased out by 2005. See chapter 12.

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