Deductible expenses are expenses that helps lower your taxable income thus reducing you tax liability. While there are several expenses that are always deductible, there are certain deductions that you cannot use for tax purposes.
What is Deductible?
- Investment Losses
- Charitable Contributions
- Healthcare spending
- Employee Business Expense
- Business Expenses (Schedule C filers)
- State Taxes
What is not Deductible?
- Personal expenses
- Travel expenses from home to work
- Donations to non-exempt organizations
- Non-business related expenses
- Reimbursed expenses
Please be aware that there are rules regarding taking certain deduction.
For Example: You must be eligible to itemize if you want to deduct expenses on a schedule A. When itemizing Healthcare and job/ employee business expenses must exceed a percentage of your Adjusted Gross Income (AGI). Charitable expenses cannot exceed 50% of your gross income. Please note: The IRS allows filers a standard deduction. In most cases, when not required to itemize, the itemized deductions
For Schedule C filers: Expenses must be strictly business related.
Consult a professional tax accountant before so they can determine if a particular expense is deductible. Contact January Accounting Service today!!!