Don't Deduct These

income tax deductions

I ran across a great post today over on Inc.com's site. It's from Kimberly Weisul and Jody Padar, who clearly know what they're talking about.

I write a lot (especially in emails to clients) about what you can and can't claim on a tax return. Kimberly & Jody have written up a great post about some of the most common types of expenses that are (but shouldn't be) claimed on small biz returns. They even add a nice touch of humour, which is something I wish more bookkeepers/accountants would include in their writing.

You really need to read through the full post, but here's a bit of a summary of the basic concept.

Be logical. Your small business return is where you claim business expenses. Before you add something to your return ask yourself one simple question. Was this money I spent in order to support my business? Sure, that 6 pack of socks will eventually find their way to your feet, and your feet will be with you when you do business. That doesn't mean you get to write off your purple knee-highs.

Here's an excerpt.

6 - Clothing or jewelry

You can deduct this if: You're a performer--actor, artist, DJ--and you're buying the clothing or jewelry for a performance. In that case, it's considered 'costuming,' and you can write it off.

This is a great one to mention. I can't tell you how many times I've had people who wanted to write off their work clothes. I have to admit that I can see their point. If you spend a lot of money on suits that you wear exclusively to the office, I can understand why you'd want to claim those costs. Unfortunately, as they point out...unless it's a costume that's used for a performance, it's not a business expense.

Do yourself a favour and read this post. I think you'll find it very useful. If you like it, make sure to follow Jody on her own site. This is a guest post for Inc, but you can find Jody's site here.

No, You Can't Deduct That: 11 Tax Deductions That Can Get You in Trouble