The Internal Revenue Code permits a number of wide-ranging deductions that may be taken into account in arriving at taxable income. However, the Code contains a number of rules and restrictions concerning the expenses that qualify as deductions and the taxpayers who may claim them. Although deductions generally reduce taxable income, deductions from gross income, available to all qualifying taxpayers, must be distinguished from deductions from adjusted gross income, available only to those taxpayers who itemize. Certain miscellaneous itemized deductions, including unreimbursed employee business expenses and investment expenses, are deductible by an individual only if the aggregate amount of such deductions exceeds two percent of adjusted gross income. In addition, deductions that can be taken currently must be distinguished from those that can be taken over a number of tax years through depreciation or amortization.
The chart below lists a number of expenses that a taxpayer might incur. Please contact us for the possible availability of a deduction, its timing, and whether it is deductible from gross income or adjusted gross income. Many deductions have special rules.
Abandonment of business real property Accident and health plans . employer contributions Accounting fees . business . capital transactions . connected with trade or business . investors . organization of business ($5,000 deduction and excess amortizable over 15 years) . reorganization of business Accounting system, installation Administrative expenses of estate Admissions to political dinners, programs, inaugural balls, etc. Advertising expenses . business cards . catalogs . . long term . generally . home demonstrations . package design costs . political convention programs and other political publications . prizes and contests . product launch costs . promotional activities Airline pilot, special clothing Airplane, heavy maintenance expenses Alcohol fuels credit, unused Alimony payments Amortization of premium on taxable bonds (optional) Appraisal fees . acquisition of capital asset . connection with trade or business Architect's fees (capital expenditure) Architectural services . domestic production activities Attorney's and accountant's fees in contesting tax claims (nonbusiness) Attorney's fees . accounting suit by former partner, defense of . acquisition of corporate control . business debts, collection of . civil rights suits . condemnation proceeding, defense of . disbarment proceedings . divorce . . obtaining alimony . . proceedings . . property settlement . personal affairs . slander prosecution (personal) . tax advice on investments . title clearance . . land . . stock . will preparation Automobile expenses . business use by employee . . unreimbursed . business use by self-employed person . . chauffeur's salary . . cost of car . . garage rentals . . gas . . insurance . . license fees . . loss on sale . . oil and lubrication . . parking . . repairs . . tires . . washing . nonbusiness casualty loss (limited) . pleasure use . rural mail carriers (limited) Bad debts, . business . nonbusiness Bar admission and examination fees Baseball player's uniforms Baseball team equipment for business publicity Black lung benefits trust, employer contributions Bookmakers, business expenses Building property, energy efficient property for commercial buildings (2006-2013) Building replacements (capital expenditure)