As for paying for the birth of the baby, speak with your doctor and see if she/he will extend you credit and see if you can set up a payment plan. If you own your own home check out a home equity loan and use your credit card as last resource for the interest rate there will be the highest. You will need to do the same thing with the hospital and see what kind of payments terms they will allow you to set up.

The tax law only provides a limited opportunity to deduct medical costs for you and your family. You may only deduct expenses exceeding 7.5% of your adjusted gross income. So if your AGI is $40,000 for 1998, any medical expenses exceeding $3,000 will be deductible. But your deduction for the health insurance is a special deduction for the self-employed so you will qualify for that. Also, your medical costs become deductions in the year you pay them.

I also suggest that you consider purchasing JK Lasser's Taxes Made Easy for Your Home-based Business, which offers help on taxes and deductions.