Financial Reports

Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax.”>There are certain expenses which you may consider deductible due to job requirements. There are some other expenses which you may consider legitimate business expenses. However IRS disagrees with you in both the cases. So better to take note of them and avoid them on your tax return.

There are many expenses which you feel as legitimate for claiming as a deduction. However IRS has made some specific rules under which these expenses are Not deductible. Let us go through the important items in the list –

1. Adoption expenses – You Cannot Deduct Expenses of adopting a child on your tax return. However you can claim a credit for those expenses by filing form 8839, Qualified Adoption Expenses.

2. Burial or funeral expenses, including the cost of a cemetery lot.

3. Campaigning expenses – You cannot deduct expenses of a campaign for a candidate for any office even though the candidate is running for re-election to that office.

4. Certain capital expenses – If you spend some money to buy a property which has a useful life substantially beyond the tax year, then such expenses are treated as capital expenses and must be added to the cost of the property.

5. Club dues – The cost of membership in any club organized for business, pleasure, recreation or any other social purpose is non-deductible. This includes business, social, athletic, luncheon, sporting, airline, hotel, golf and country clubs.

6. Commuting expenses – The cost of commuting from your home to your main or regular place of work is not deductible.

7. Parking tickets – Parking tickets are issued for violation of traffic rules. You cannot claim such charges as a deduction.

8. Expenses on a health spa – You may try to claim these expenses under the reason – essential for keeping your health in excellent condition as a job requirement. However, these are personal expenses and cannot be claimed as a deduction.

9. Home Security System – If your install a Home Security System, you cannot claim such expenses as deduction. However if you have a home office, you can claim such cost as a business expense.

10. Life Insurance premiums – The premiums you pay on your Life Insurance are not deductible. However if you pay premiums on Life Insurance policies assigned to your former spouse, you can deduct them as alimony.

11. Lobbying expenses – You cannot deduct amounts paid towards lobbying expenses including expenses to influence legislation, or expenses to participate in any political campaign. 12. Personal legal expenses – Expenses for custody of a child, expenses for preparation of a will, damages for personal injury are all personal expenses and hence not deductible.

13. Political Contributions – Contributions made to a political candidate or to a campaign committee are not deductible.

14. Professional accreditation fees – Fees paid for their initial right to practice accounting, bar exam fees, medical and dental licence fees to get initial licensing are all nondeductible items.

15. Residential telephone service – You cannot deduct any charge for basic local telephone service for the first telephone line to your residence even though the line is used in a trade or business.

16. Expenses relating to tax exempt income – You cannot deduct expenses relating to get tax exempt income like tax-exempt interest.

17. Wristwatches – The cost of wristwatch cannot be deducted even though there is a job requirement that you should know correct time to perform your duties.

If you claim any of the above expenses on your tax return as a deduction, they are certainly going to be disallowed and you will be charged with additional taxes as well as penalties for underpayment of taxes. So it is always advisable to keep away from all these expenses on your tax return.

Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. He has written many books explaining inside secrets of the magic world of personal finance. His famous eBook Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax.