Tax Write Off List

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A tax write off refers to itemized deduction of an item’s value from a person’s taxable income. A tax write off list is extremely useful as it will help you to reduce the gross income on which tax is calculated and this helps in reducing your taxes.     

If you earn $50,000 a year and are eligible to write off $100 for telephone because it is a legitimate business expense, your taxable income will reduce to $49,900; and if you are in the 25 percent income bracket, your income tax will reduce to $12,475 from $12,500.

In the tax write off list there are more than 300 items that business owners can avail of to save themselves thousands of dollars when it comes to paying taxes. Just to clarify, a write off does reduce your taxes. Instead it reduces your taxable income and this is something you should be aware of. You cannot write off any personal expenses. All write offs have to business expenses.

Following is the tax write off list that is commonly used by businesses:

– Cost of Goods Sold — the costs for products and raw materials, including shipping
– Labor costs for workers who make your products
– Factory overhead expenses
– Product storage costs
– Capital Expenses
– Business Use of Your Home
– Business Use of Your Car
– Employees’ pay
– Union Dues
– Retirement plans (for you and your employees)
– Rental expenses
– Interest
– Taxes (some)
– Insurance
– Advertising
– Stationery and supplies
– Student loan interest
– Half of the self-employment tax paid
– Self-employed health insurance premiums
– Penalty on early withdrawal of savings
– Alimony paid, but not child support
– Medical transportation expenses including tolls, parking, and mileage for trips to health facilities, doctor’s offices, laboratories, etc.
– Nursing home expenses that are primarily for medical care
– Medical aids such as crutches, canes, and orthopedic shoes
– Hearing aids, eye glasses, and contact lenses
– Hospital fees for services such as nursing, physical therapy, lab tests, and x-rays
– Equipment for disabled or handicapped individuals
– Part of the life-care fee paid to a retirement home designated for medical care
– The cost of alcohol and drug abuse and certain smoking-cessation treatments
– Special school costs for mentally or physically handicapped individuals
– Wages for nursing services
– State income taxes owed from a prior year and paid in the tax year
– Personal property taxes on cars, boats, etc.
– Taxes paid to a foreign government
– Mandatory contributions to state disability funds
– Points paid on mortgage or refinancing
– General sales tax deduction (including tax paid on large items such as cars or boats) in lieu of the income tax deduction
– Cash and noncash contributions to a qualified charity
– Mileage incurred in performing charitable activities
– General casualty and theft losses in excess of $100 and totaling more than 10% of adjusted gross income
– Education expenses you paid to maintain or improve job skills
– A handicapped individual’s work-related expenses
– Professional journals, magazines, and newspapers that are job-related
– Cost of safe deposit box used for investments or business
– Seeing-eye dogs for the handicapped or guard dogs for a business
– Required uniforms and work clothes not suitable for street wear
– Employment agency fees or commissions in certain cases
– Home office expenses, if for your primary place of business
– Job-seeking expenses within your present field of employment
– Reservist and National Guard overnight travel expenses
– Dues to professional organizations
– Business gifts up to $25 per customer or client
– Your moving expenses
– Business expenses including travel, meals, lodging, and entertainment not reimbursed by your employer
– Cleaning and laundering services while traveling for business
– Tools for use at your job
– Cellular phones required for business
– Worthless stock or securities
– Commission to brokers or agents for the sale of property or property management
– Fees for tax preparation or advice
– Legal fees to collect taxable alimony or Social Security
– Hobby expenses to the extent of hobby income you included in gross income
– Services of a housekeeper, maid, or cook needed to run your home for the benefit of a qualifying dependent while you work
– Gambling losses to the extent of your gambling winnings