Code Section 165 basically establishes the general outline that governs the deductibility of losses. This statute permits a deduction for the following categories of losses as long as they the taxpayer is no reimbursed through insurance or otherwise: 1. Losses incurred in a trade or business (deductible without limitation) 2. Losses incurred in transactions entered into for profit, though not connected with a trade or business (deductible as capital losses); and 3. Losses of property not connected with a trade … Read more →

A medical expense deduction is allowed for premiums paid for medical care insurance, subject to a 7.5 percent limitation. If amounts are payable under an insurance contract for services that are not related to medical care, no amount paid for the insurance is deductible unless the medical care charges are stated separately in the contract or furnished in a separate statement. Amount of Deduction Long term health care insurance premiums are deductible, for 2012, the maximum deduction for prepaid long … Read more →

Transportation expenses are defined for tax purposes as the actual cost of transporting an individual from one location to another when the individual is not travelling away from home overnight for business. Normally, transportation expenses will include airline fares, taxi fares, automobile expenses, parking fees, tolls, and other expenses of this nature. Self Employed Transportation Transportation expenses of a self employed taxpayer are deductible for adjusted gross income as a trade or business expense. Unreimbursed employee transportation expenses are deductible … Read more →

In 2004, the American Jobs Creation Act was passed which created a new deduction for manufacturers. This deduction effectively reduces the corporate income tax rate for domestic manufacturing three percentage points from a maximum rate of 35 percent down to 32 percent. Who Qualifies Domestic manufacturers must be explained in more detail because many more manufacturers beside traditional manufacturers qualify for the deduction. These manufacturers include domestic producers in the areas of construction, engineering, energy production, computer software, files and … Read more →

If you have outstanding student loans, you may benefit greatly by deducting the interest that is paid on them. Interest payments on student loans are deductible as an above the line deduction. This means that a taxpayer can deduct the interest whether or not they itemize deductions. In 2012, a person who is eligible for the student loan interest deduction may deduct up to $2,500 of interest expense on a qualified education loan. If you are unsure if your loan … Read more →