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deduction loopholes????

Discussion in 'Business Operations' started by nelson279, Mar 16, 2003.

  1. Mike Bradbury

    Mike Bradbury LawnSite Senior Member
    Posts: 493

    Initial post said "tax preparer". Not the same thing as CPA.
  2. Mike Bradbury

    Mike Bradbury LawnSite Senior Member
    Posts: 493

    Normal work time meal expenses are not deductable.
  3. hoyboy

    hoyboy LawnSite Senior Member
    from Chicago
    Posts: 346

    I personally don't like the term "loophole" because it denotes "cheating," as in "oops, I found an error in the tax code and I'm going to exploit it."

    There are tax laws that can be advantageous if followed. They are often labeled "loopholes" by those who know they are there, but are jealous that they can't use them.

    In general, all income is taxed. The IRS recognizes that certain costs are incurred to generate that revenue, however, and correctly allows those costs to be deducted from the revenue before figuring the tax.

    Health insurance for an employee is an expense of an employer associated with producing revenue...it is therefore deductible. Health insurance for an individual is not associated with producing revenue, and therefore is not deductible. It is not a "loophole," but a legitimate expense deduction.

    It's amazing the many other legitimate expenses I hear people calling "loopholes." They are not. They are simply costs of doing business that many people may overlook. The space I use in my home, for instance, is a real cost. The fact that my brand new mower I purchased a year ago is worth 75% of it's original value is not a "loophole," but a real cost.

    And yes, the DVD player I bought to show training videos is also a legitimate expense.

    For the most part, the IRS has stayed away from defining what is "A" business expense and what is "A WISE" business expense. In other words, they will give me a deduction for that DVD player whether it was a wise purchase or not. That policy is good. I am very concerned when the IRS, or any government agency, starts telling me that my money was spent poorly and therefore not a legitimate expense. It is a very slippery slope and one they should avoid and one we should fight tooth and nail. For instance, they have started limiting country club dues, and the infamous "listed items" and "luxury tax items" are ways they have begun to do just that.

    I'll get off my soap box now...

    Dan Norton
    Hoy Landscaping, Inc.
  4. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    Season tickets to the #1 college hockey team in the nation - Colorado College Tigers!! Advertising. I actually do take sales and counter guys from my supplier as well as other contractors. Only when my wife can't go since she in the Alumn.
  5. Lombardi

    Lombardi LawnSite Senior Member
    Posts: 538

    That is actually considered an entertainment expense. 50% deductible.
  6. OutdoorCare

    OutdoorCare LawnSite Member
    from MN
    Posts: 2

    I am a tax preparer, and you can deduct a portion of your own personal health insurance premiums if you are not able to get coverage by any other source (i.e. other employment, spouses plan, etc.). The full amount is not deductable, but up to 70% can be.
  7. MOW ED

    MOW ED LawnSite Fanatic
    Posts: 5,028

    The computer that you are using right now as well as your internet connection are being used for business purposes.

    Just adding my 2 cents to save you 2 cents.;)
  8. Tharrell

    Tharrell LawnSite Silver Member
    Posts: 2,964

    How about some good, quality tools?

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