Non-Deductible Expenses
| Determining what is and what is not a deductible expense can be a frustrating and inexact exercise. Particularly daunting is the fact that if you make the wrong determination about an expense, it could result in an audit, interest, and penalties. Below is a checklist for you to use in identifying expenses the IRS has determined are not deductible. The list is not all-inclusive, but contains the most common nondeductible expenses. In other words, do not assume that just because an expense is not on this list it can be deducted. | |
| ____ | Broker's commissions that have been paid in relation to your IRA or other investment property. |
| ____ | Burial or funeral expenses, including the cost of a cemetery lot. |
| ____ | Capital expenses. |
| ____ | Car licenses. |
| ____ | Marriage licenses. |
| ____ | Dog tags. |
| ____ | Home repair, insurance, and rent. |
| ____ | Hobby losses. |
| ____ | Illegal bribes or kickbacks. |
| ____ | Personal disability insurance premiums. |
| ____ | Personal living or family expenses. |
| ____ | The value of wages that were never received. |
| ____ | Lost vacation or sick time. |
| ____ | Campaign expenses and legal fees associated with running a campaign. |
| ____ | Check-writing fees on a personal checking account. |
| ____ | Membership dues for any club organized for business, pleasure, recreation, or other social purpose. This does not include professional societies. |
| ____ | The cost of transportation between your home and your main or regular place of work. |
| ____ | Fines or penalties paid to a government entity for violating a law. |
| ____ | Health club expenses, even if your are required to stay in shape for your job. |
| ____ | Homeowners' insurance premiums. |
| ____ | Home security systems, assuming you do not have a home office in your home. |
| ____ | Expenses related to attending a convention, seminar, or similar meeting for investment purposes. |
| ____ | Life insurance premiums, unless they are part of an alimony payment. |
| ____ | Lobbying expenses to influence legislation, to participate in any political campaign for or against a candidate, to influence the public in regard to elections, legislative matters, or referendums, or to communicate directly with branch office officials to influence official actions. |
| ____ | Any portion of a contribution to a tax-exempt organization that is used for lobbying purposes. |
| ____ | Expenses related to eating lunch with your coworkers, except while away on business. |
| ____ | Expenses related to meals necessitated by working late unless you are out of town or it is part of entertaining clients. |
| ____ | Legal expenses associated with gaining custody of your children. |
| ____ | Legal expenses associated with civil or criminal charges resulting from a personal relationship. |
| ____ | What you have to pay in damages in a personal injury suit. |
| ____ | Legal fees associated with preparing a will. |
| ____ | What you have to pay in a divorce settlement. |
| ____ | Contributions made to a political candidate, campaign committee, or newsletter fund. |
| ____ | Accounting certificate fees for the initial right to practice accounting. |
| ____ | Bar exam fees and other incidental expenses in obtaining admission to the bar. |
| ____ | Medical and dental license fees to obtain initial licensing. |
| ____ | Expenses associated with radio and television appearances meant to increase your personal prestige or professional reputation. |
| ____ | Contributions made to a coworker who can not work due to illness or job-related injuries. |
| ____ | Basic local telephone service charges for the first telephone line to your residence, regardless of whether it is used for business. |
| ____ | Expenses associated with attending shareholder meetings if your only association with the company is your stock investment. |
| ____ | Expenses associated with producing tax-exempt income. |
| ____ | Interest on a debt incurred to purchase tax-exempt securities. |
| ____ | The cost of a wristwatch, even if your job requires strict timeliness. |
| ____ | Clothing for work that is not worn as a condition of employment or is suitable for everyday wear. |
| ____ | Most personal interest. |
| ____ | Most service charges. |
| ____ | Annual fees on personal credit cards. |
| ____ | Finance charges on credit cards, installment contracts, and revolving charge accounts incurred for personal expenses. |
| ____ | Late payment charges by a public utility. |
| ____ | Federal income taxes. |
| ____ | Most estate, inheritance, legacy, or other succession taxes. |
| ____ | Gift taxes. |
| ____ | Social security taxes withheld from your pay. |
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