With all the talk about what is tax deductible because it is tax time once again, it is important to address not only tax write offs, but what tax write off mistakes are made by "do it yourselfer" tax preparers as they put together their tax deduction itemization schedules. The last thing that anyone wants is to have the IRS knock on your door for mistakes on your tax return.
Common Non Deductible Expenses That Get Deducted By Mistake
- Employer Reimbursed Business Expenses
- A home phone line
- Home internet access - unless used for business purposes and can be substantiated
- Non business dry cleaning and laundry bills
- Country club dues, dues to golf clubs and other athletic clubs
- Dues to hotel and travel clubs
- Non job required business clothing
- Finanical losses due to a hobby
- Inheritance Taxes paid
- Professional licensing exam fees such as the bar and mortgage broker licensing exam fees
- Penalties or fines paid due to violating the law - late tax return filing penalties, child labor, traffic tickets
- Expenses paid to a lobbyist
- Tax penalty payments
- Life Insurance Policy Premiums if business is beneficiary of said policy
- Job or employment search expenses if not in same line of work
This is a short list non deductible items that get incorrectly deducted from many personal and business tax returns. There are many resources available online to check to see whether an item is tax deductible or not. If you are looking to stay out of trouble with the IRS it is always best to check with a tax preparation professional to provide guidance in preparing your annual IRS personal or business tax return.
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