POSSIBLE DEDUCTIONS  

Many clients ask me what they can deduct, so I am providing the following list.  This list is only meant to give you ideas,
or steer you in the right direction.  It is not all-inclusive and not all items are deductible all the time.  Many are subject to
limitations, may only apply in certain situations or are governed by other rules:

Business Expenses

If you are an employee, these are deductible on Schedule A, but you only get the amount in excess of 2% of your
adjusted gross income, and only if you can itemize.  If you're self-employed, these are deductible in full ( but possibly
subject to other limitations):

Accounting Fees
Advertising
Airline Fares
Alterations on property
Amortization
Appraisal Costs
Assessment paid to union
Attending certain conventions
Auditing fees
Automobile expenses
Awards
Bad Debts
Bail bond fee
Bank Charges
Board given employees
Bookkeeping expenses
Buy-out, expenses to prevent
Capital loss carryover
Carrying charges
Carry back or Carryover of net operating loss
Cash discounts
Casualty losses (limited)
Chamber of Commerce dues
Chauffeur
Charitable Contributions
Christmas gifts
Circulation expenses
Cleaning costs
Club dues
Collection of business debts
Commissions
Commitment fees
Compensation
Compromise of business debts
Computer hardware
Computer software
Confiscation, foreign property
Contracts
Contributions to employee benefit plans
Convention expenses
Corporate representation
Cost of business calls charged to home phone
Damages paid
Defending court actions
Depreciation
Development expenses Discounts
Dissolution expenses
Dividends
Donations
Dues
Efficiency expert's fee
Entertainment of a client
Equipment
Escrow fees
Expenses to eject tenant
Exploration expenses
Feasibility studies
Fees paid
Food for business purpose
Gifts for business purpose
Handicapped, removal of barriers to
Health insurance premiums
Home office expenses
Idle property maintenance
Income tax-state
Incorporating fees
Insurance premiums
Interest expense
Inventory shortages
Judgments for business damages
Key man life insurance
Kickbacks (legal)
Landlord property repair
Leases
Legal fees
Library expenses
License and fees
Loan fees
Lobbying costs
Lodging expenses
Losses
Machinery abandonment
Mailing costs
Management expenses
Meal expenses
Mileage allowance
Moving expenses (limited)
Net operating loss
Non-competition fee
Obsolescence
Occupational taxes
Office expenses
Office rent Ordinary and necessary business expenses
Organizational expenses
Parking
Passport for business travel
Pension fund contribution
Postage
Professional dues
Profit-sharing plan contributions
Promotion expenses
Property taxes
Publicity and selling expenses
Railroad fares
Real estate taxes
Rental property painting expense
Rentals for business
Rental of apartment (if away from tax home temporarily)
Repairs
Research costs
Royalty payments
Safety equipment
Salaries
Social Security taxes paid (employer share-for corporation
Subscriptions (business-related publications)
Supplies
Taxes paid
Taxi fares
Theft losses
Tolls
Tools
Trade journal subscription
Trademark expenses
Trade name expenses
Transportation expenses
Travel and lodging for business
Typewriters
Worker's compensation fund payments


Casualty and Theft Losses

Accidents
Automobile damage
Blackout losses
Blight
Blizzard losses
Burglary losses
Clean-up costs
Construction losses
Damage to property for personal use
Demolition losses
Disaster losses
Drought losses
Embezzlement
Fire (limited)
Flood losses
Fraud losses
Hurricane losses
Insect damage
Livestock killed by lightning
Mine cave-in
Natural phenomenon
Property damage
Riot losses
Shrub damage
Storm damage (limited)
Tornado damage
Tree damage
Vandalism
Volcano damage
Water damage (limited)

Charitable Contributions

Charitable mileage for volunteer activities at .14 per mile for 2003
Charitable percentage of organizational dues exceeding value of subscription magazine received
Contributions to:
Charity balls
Charity banquets
Domestic fraternal societies
Goodwill Industries
literary organizations
Salvation Army
Boy/Girl Scouts
United Way
War veterans organizations
Other qualified domestic charities
Excess cost of attending charitable benefit over value received
Excess of payments for items bought from charitable organizations over value received
Out of pocket expenses on behalf of charitable activities
Pooled income funds
Qualified conversion contribution
Remainder interests
Travel costs

Credits

Technically, these are not deductions, but dollar for dollar reductions of tax.  Most are limited to your tax liability, while a
few (such as the earned income credit) are refundable.

Alcohol fuels
Child Tax Credit
Dependent care
Earned income (usually for low income families with children)
Elderly and permanently disabled
Employee stock option plans
Experimentation
Foreign taxes
General business
Hope (tuition paid in first or second year of college)- maximum $1500
Lifetime Learning (tuition, anytime)-maximum $2000
Mortgage credit certificates
Research
Social Security overpayment
Targeted jobs credit


Exclusions

These items are not subject to tax.  They are either not reported as income, reported for informational purposes only,
or included in and then subtracted out of income.

Car pool receipts from car owner
Cash rebate on new car purchase
Child support
Damages
Expenses under scholarship
Fellowships
Grants
Inheritance
Interest collected on life insurance proceeds to surviving spouse
Life insurance proceeds
Medical grants
Medical insurance proceeds
Prizes
Sales of principal residence (up to $250,000 of gain; $500,000 for Married Filing Jointly)- must have lived in residence
for 2 out of past 5 years
Scholarships
Social Security benefits (limited)
Student loan interest subsidy
U.S. Disaster relief proceeds
Work study programs

Interest Expense

Interest on business loans
Interest on margin accounts
Mortgage or Home Equity interest (may be limited)
Mortgage prepayment penalties
Penalties of early withdrawal of savings or CD's
Points on principal residence financing (may have to amortize if not a new acquisition)


Medical Expenses

Generally, you can only deduct the excess over 7.5% of Adjusted Gross Income, and then only if you can itemize on
Schedule A.

Acupuncture
Air conditioning (limited)
Alcoholism treatment
Ambulance hire
Analysis
Animal trained to aid deaf person
Artificial limbs
Artificial teeth
Batteries (hearing aid)
Birth control
Blind person's expenses
Blood donation expenses
Braces
Braille books
Capital expenses
Chemotherapy
Child care expenses
Chiropractors
Christian science practitioners
Clinical care
Computer storage of medical history
Contact lens and insurance
Contraceptive devices
Cosmetic surgery
Crutches
Dental fees
Dental supplies
Dentures
Dermatologists
Diagnostic fees
Diathermy treatments
Doctor's fees
Drug addiction therapy
Drugs (prescription)
Elastic stockings
Electrolysis
Elevator (special)
Exercises (special)
Eye doctors
Eye examinations
Eyeglasses
Face lift operation
False teeth
Filters
Fluoride water supply device
Food (special)
Guide dog for the deaf
Gum treatment
Gynecologists
Hair transplants
Healing services
Health institutes
Health insurance
Hearing devices
Hospital fees
Hospitalization insurance
Incubator
In-patient care
Insulin
Insurance premiums (self-employed)
Iron lung
Lab fees
Legal fees (medical related)
Lifetime medical care
Lip reading lessons for the deaf
Lodging expenses
Mammography
Mattress (special)
Meals
Medical information plan
Medical premiums
Medical transportation
Medicine (prescription)
Mentally retarded, special home
Midwife fees
Neurologists
Note taker for the deaf
Nurse's fees
Nursing homes
Nursing services
Obstetricians
Occupational therapy
Operations
Ophthalmologists
Orthodontia
Orthopedic shoes
Osteopaths
Oxygen equipment
Patterning exercises, retarded children
Pediatrician
Physical therapy
Physician fees
Plastic surgery
Plywood board (for arthritic condition)
Prescription drugs
Psychologist fees
Reclining chair (special)
Retirement home care
Sanitarium stays
Schools (special)
Seeing-eye dog
Sexual problems (treatment for)
Special diet
Specially designed cars
Sterilization fees
Supplements
Surgical fee
Telephone calls to psychologist
Telephone (specially equipped for the deaf)
Tests
Therapy
Thermography
Transportation for medical care
Tuition at special school
Unlicensed medical practitioners
Vaccines
Vasectomy
Vitamins (special)
Weight reduction program (special)
Wheelchair
Whirlpool bath
Wigs (special)
X-rays

Personal Expenses


Adoption expenses
Alimony expenses
Armed forces uniforms
Education expenses (to improve skills in current profession)
Gambling losses (offset by winnings)
Hobby expenses (to the extent of hobby income)
Home office
Investment expenses:
Accounting fees
Brokerage fees
Investment fees
Legal fees
Safe deposit box rental
Job search costs (travel & resume preparation)
Moving expenses- travel to new home, and transportation of household goods only
Professional dues
Security deposits
Union dues
Union initiation fee
Work clothes: boots, gloves, helmet, protective clothing, smocks, uniforms, etc.

Taxes

Certain special assessments
City income tax
Condo or co-op maintenance (property tax portion)
Disability insurance tax (some states)
Foreign taxes
Income tax (local)
Income tax (state)
Obtaining IRS rulings
Occupational taxes
Preparation of tax return
Real property tax
Withholding taxes

Other

Actor's costumes
Alarm systems
Arbitration fees
Author's expenses
Auto license fees (limited)
Bank failure, loss of deposits
Bodyguard fees
Capital losses (up to $3000 in excess of capital gains)
Civil defense volunteer expenses
Estate planning fees
IRA contributions
IRA custodial fees
Joint venture losses
Keogh/SEP plan contributions
Keogh/SEP plan custodial fees
Losses: Forced sales, forfeiture, worthless stock
Management fees
Musician's instrument repairs
Olympic games contribution
Partner's proportionate share of losses
Pest control
Photographs for appraisal
Ransom
Redemption penalty
Reforestation expenses
Removing lead-based paints
Resume preparation
Rewards
Sabbatical leave
Soil conservation costs
Special tutors
Tax shelters
Travel to look after income producing property
Up-keep & cleaning of uniforms for work
Voluntary employee contribution
Worthless securities

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