A deductible expense is one you can subtract from your taxable gross income, reducing your tax liability. Certain expenses are always deductible, while others can never be deducted.
Most common non-deductible expenses:
Burial, funeral, and cemetery expenses
Capital expenses
Car licenses
Marriage licenses
Pet tags and registration fees
Rent payments
Travel expenses for another person
Personal disability insurance premiums
Personal living or family expenses
Late payment charges by a public utility
Federal income taxes
Adoption expenses (but they might qualify you for the Adoption Tax Credit)
Investment seminar and convention expenses
Wages never received
Lost vacation or sick time
Voluntary unemployment benefit fund contributions
Lost or misplaced cash or property
Losses from the sale of your home, furniture, car, or other personal property
Check-writing fees on a personal checking account
Membership dues for any club organized for business, pleasure, recreation, or other social purpose (this does not include professional societies)
Cost of transportation between your home and your main or regular place of work
Fines or penalties paid to the government for violating a law
Health club expenses, even if your are required to stay in shape for your job
Homeowners' insurance premiums
Home security systems, assuming you do not have a home office in your home
Expenses related to attending a convention, seminar, or similar meeting for investment purposes
Life insurance premiums, unless they are part of an alimony payment
Lobbying expenses to influence legislation, to participate in any political campaign for or against a candidate, to influence the public in regard to elections, legislative matters, or referendums, or to communicate directly with branch office officials to influence official actions
Relief fund contributions
Lunches with co-workers, except while away on business
Expenses related to meals necessitated by working late unless you are out of town or it is part of entertaining clients
Legal expenses associated with gaining custody of your children
Legal expenses associated with civil or criminal charges resulting from a personal relationship
Fines and penalties you have to pay in damages in a personal injury suit
Legal fees associated with preparing a will
What you have to pay in a divorce settlement
Contributions made to a political candidate, campaign committee, or newsletter fund
Accounting certificate fees for the initial right to practice accounting
Bar exam fees and other incidental expenses in obtaining admission to the bar
Medical and dental license fees to obtain initial licensing
Professional reputation improvement expenses
Contributions made to a coworker who can not work due to illness or job-related injuries
Basic local telephone service charges for the first telephone line to your residence, regardless of whether it is used for business
Expenses associated with producing tax-exempt income
Interest on a debt incurred to purchase tax-exempt securities
Clothing for work that is not worn as a condition of employment or is suitable for everyday wear
Wristwatches (even if related to a job requirement)
Annual fees on personal credit cards
Finance charges on credit cards, installment contracts, and revolving charge accounts incurred for personal expenses
Most estate, inheritance, legacy, or other succession taxes
Gift taxes
Do you still have questions about deductible vs non-deductible expenses? Give us a call, we can help.