Category Archives: Deductions

Deductibility of Business Expenses

Since personal expenses are not deductible under the tax law, deductibility of an expense requires that the expense be a business or investment expense. Generally, such expenses relate to activities that are engaged in for profit. While business and investment … Continue reading

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Deductibility of Medical Expenses

Expenses incurred for medical care are deductible to extent they exceed 7.5% of the taxpayer’s adjusted gross income, as provided by Code Sec. 213.  Accordingly, a taxpayer with $75,000 of adjusted gross income would be allowed no deduction for medical … Continue reading

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Substantiation Required for Charitable Contributions

Two significant statutory limitations now restrict the deductibility of charitable contributions. These limitations, the result of changes made in the tax law in 1993, impose new requirements relating to substantiation and disclosure. Amended Code Sec. 180(f)(8) now requires that all … Continue reading

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Itemized Deductions

Deductible expenses may be classified as either above-the-line or below-the-line deductions. While above-the-line deductions reduce gross income, below-the-line or itemized deductions reduce adjusted gross income (AGI). For a taxpayer in the 39.6 percent tax bracket, each dollar of above-the-line deduction … Continue reading

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Home Office Deductions

Revenue Ruling 94-24 interpreted the Supreme Court’s 1993 Soliman decision regarding home office deductions. Soliman v. Commissioner, 93-1 USTC ¶50,014 (1993). Largely reinstating an earlier position of the Tax Court, the Court held that home office deductions are statutorily permissible … Continue reading

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