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15 Non-Deductible Business Expenses

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By Debbie Gregory.

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New changes to the US tax laws have made certain expenses no longer deductible.


Here is a quick list of 15 things you cannot write off on your taxes:

1.) Entertainment

Companies used to be able to deduct the costs of entertaining clients or employees, this is no longer the case. Now, you may not deduct any portion of items such as tickets to the theater or sporting events is deductible.


2.) Meals

Meals for clients and employees, such as entertainment, used to be deductible on business taxes. Now, only 50% is deductible and even that is only allowable in specific cases. There are still a few exceptions, such as company picnics or break room snacks, where you can deduct the entire cost.


3.) Commuting

No matter what form of transportation you use to get back and forth to work or how lengthy or difficult it is to get to your business and home again, you are not permitted to write off the costs of commuting.


4.) Work Clothing

In the past, purchases of business appropriate attire were deductible. Now, only clothing not suitable for any possible street use, such as company specific uniforms, hardhats, etc., can be deducted.


5.) Gifts

The deduction for giving gifts to business associates, vendors, customers, etc. is now capped at $25.00 per gift/person, even if it makes good business sense, in certain situations, to give a more expensive gift.


6.) Medicare Taxes

If your income is high enough, you cannot deduct the 0.9% additional Medicare tax paid on net earnings from self-employment or employee wages and the 3.8% net investment income tax paid on income from any business investments.


7.) Club Dues

Participating in a golf or tennis club, social club, or fitness center may be a great way for you to meet and network with possible clients and customers. However, the dues you pay to be a member aren’t deductible.


8.) Exploratory Costs

A lot of people spend money researching business opportunities before starting their new company. This money is no longer tax-deductible. Though, once you start the business, those exploratory expenses can be treated as start-up costs and then can be deducted in the first year of business.


9.) Property Purchases

Legal fees paid to assist with property purchases cannot be deducted on their own. Instead, these fees are added to the cost basis of the property. A portion of the fees can potentially be recovered through depreciation.


10.) Fines and Penalties

Generally, government-imposed fines and penalties are nondeductible, regardless of the amount or reason for the fine.


11.) Excess Business Losses

Excess business losses for non-corporate taxpayers are treated as a net operating loss carryover and cannot be deducted.


12.) Interest on Tax Underpayments

Sole proprietors and owners of pass-through entities (non-corporate taxpayers) that pay interest on tax underpayments cannot deduct them. The interest is viewed as personal interest even if it relates to business income.


13.) Interest Expense Payments

If your annual gross receipts for the three prior years exceeds $25 million dollars, you cannot deduct any of your interest expenses on borrowing.


14.) Certain Employee Expenses

Reimbursements for employees’ commuting costs or moving expenses are not deductible.


15.) Net Operating Loss Carrybacks

Only farmers can deduct carrybacks. All other business entities are only allowed carryforwards and they can only be used to offset 80% of the taxable income.


All these tax law changes can affect your bottom line. Working with a CPA or a good tax or accounting service can help you better adapt to these changes and offset some of their potential impact. Always consult with professionals if you have questions or need guidance with any federal, state, or local law changes and tax issues.


Commonly Overlooked Business Deductions

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By Debbie Gregory.

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Since tax laws are constantly changing, it can be quite challenging for a non-tax professional to stay on top of every change and every possible deduction that is out there. Therefore, many deductions are totally overlooked by most people.


Here are ten of the most common business deductions that are usually forgotten (or simply unknown) when tax time comes around:


1.) Depreciation

It is always a good idea to look over the prior year’s taxes to make certain that you are properly writing off any depreciation of business property. For more information on depreciation please read the IRS publication here :


2.) Bad Debt

If you or your business loaned money to someone and you have not been repaid you may be able to deduct that loss from your taxes.


3.) Cancellations

Not everything goes according to plan and often failed plans come with hefty fees. This category refers to things like a business trip that you had booked that you were forced to reschedule. The fees from the airline or hotel that you lost can be deducted.


4.) Bank Fees

If you pay any fees to banks for your business checking account, ordering checks, ATM fees, or any other banking fees you can deduct those fees.


5.) Accounting Fees

If you pay a CPA or tax professional to prepare your taxes every year, that fee you pay to them is deductible on your next year’s taxes. Make sure to check the prior year and get that deductible. Please check with your tax professional as there have been some changes regarding this deduction.


6.) Carryover

Taxes from prior years can occasionally provide you deductions in the current tax year. Carryovers can include items such as capital losses, investment interest, charitable contributions, home office deductions, operating losses, and more. It is always a good idea to re-check prior years when you sit down to do your taxes.


7.) Travel Expenses

Most people know that business travel expenses like car rentals and airfare are all deductible but they often overlook smaller fees that can really add up. Fees such as baggage fees, toll roads, or optional vehicle insurance.


8.) Home Office

Roughly half of all businesses in the US report as home-based businesses and in response, the IRS has created a standard deduction for home office use. If you qualify, don’t forget to grab this deduction. For more on home office deductions please visit the IRS’ website here :


9.) Startup Costs

If you started your business during the year you are filing your taxes, you may qualify for a number of deductions for costs incurred before you even opened your doors. These costs are treated like capital expenditures and are added as an investment in the business. In your first business year, you can deduct up to $5,000 and any remaining costs over that amount are then amortized (up to 15 years).


10.) Miscellaneous Expenses

There are a whole lot of smaller expenses that you can and should deduct on your taxes related to business. Items such as grabbing a cup of coffee with a customer, sending a vendor a thank you gift, and business or trade magazines. It is best to keep a good log of these smaller expenses, along with their receipts. For more on these types of expenses and what you can deduct please take a few minutes to look over the IRS’ web page on this topic here :


If you have any questions, concerns, or a desire to learn about more potential tax breaks for you or your business, it is best to sit down with a certified CPA or tax advisor. You can also go to the IRS’ website ( at anytime and learn more.