Thursday, August 8, 2013

Know More About Non Deductible Expenses

Who wants to be burden by paying a lot of taxes? What goes to the taxes are always our hard eared money. Tax is one integral part of living and you are bound to pay for them but doesn’t mean that it has to burden us.

A lot of us tend to lower our taxes by simply getting as many deductions as possible. We lower the taxes that we have to pay as much as possible. With this you get to cut on your income base so you fall under a lower tax bracket thereby paying lower taxes.

However, you do need to be cautious in doing so. Not all deductibles can be deducted. Just one way of saying, just because you think you can deduct on expenses doesn’t necessarily mean the IRS will agree with you.

Let say you have a home based business and you use your home phone primarily for that purpose. While you may resort to deduct the cost of that phone but you can’t, it’s because the IRS considers that as a personal expense.

Fortunately, it’s not all that bad. You can simply omit all the charges that you accumulated for those business related phone calls. However, if you put in another phone line for the use of your home business then the expenses for this one is deductible so this can work to your advantage.

When it comes to going to and fro your work, you simply cannot deduct this cost to your taxes. All costs is to your personal expenses even if it takes you few hour travel to your workplace.  Although, you can deduct expenses accrued if you go from one workplace to another even if it’s not the same employer. The same is true for expenses gathered going to meet clients and other out-of-office events and meetings.

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