deduction_checklist - WK_: U.S. Master Tax Guide (2011),...

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Unformatted text preview: WK_: U.S. Master Tax Guide (2011), 57, Checklist for Deductions.pdf 2011 Wolters Kluwer. All rights reserved. 1 U.S. Master Tax Guide (2011), 57, Checklist for Deductions Click to open document in a browser The Internal Revenue Code permits a number of wide-ranging deductions that may be taken into account in arriving at taxable income. However, the Code contains a number of rules and restrictions concerning the expenses that qualify as deductions and the taxpayers who may claim them. Although deductions generally reduce taxable income, deductions from gross income, available to all qualifying taxpayers, must be distinguished from deductions from adjusted gross income, available only to those taxpayers who itemize. Certain miscellaneous itemized deductions, including unreimbursed employee business expenses and investment expenses, are deductible by an individual only if the aggregate amount of such deductions exceeds two percent of adjusted gross income (see 6064.01 of the STANDARD FEDERAL TAX REPORTER). In addition, deductions that can be taken currently must be distinguished from those that can be taken over a number of tax years through depreciation or amortization. The chart below lists a number of expenses that a taxpayer might incur. The chart indicates for each expense a symbol(s) representing the possible availability of a deduction, its timing, and whether it is deductible from gross income or adjusted gross income. Many deductions have special rules. The chart also provides the U.S. Master Tax Guide paragraph number where further information on the deduction may be found. The following symbols are used: D/GI = Deductible from gross income D/AGI = Deductible from adjusted gross income D/Am = Deductible over a period of time ND = Nondeductible Abandonment of business real property .................................................. D/GI, 1118 Accident and health plans . employer contributions ................................................................. D/GI, 908 Accounting fees . business ....................................................................................... D/GI, 901 . capital transactions ....................................................................... D/Am, 903 . connected with trade or business ................................................. D/GI, 901 . investors ....................................................................................... D/AGI, 1086 . organization of business ($5,000 deduction and excess amortizable over 15 years) ............................................................. D/GI, D/Am, 904 . reorganization of business ........................................................... ND, 904 Accounting system, installation ................................................................ D/GI, 991 Administrative expenses of estate ........................................................... D/AGI, 2925 Admissions to political dinners, programs, inaugural balls, etc. ...............Admissions to political dinners, programs, inaugural balls, etc....
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deduction_checklist - WK_: U.S. Master Tax Guide (2011),...

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