location, and the amount of time spent in the home office. If deductible, deduction limited to the gross income from use of home office deductions that are – allowable regardless of home use (mortgage interest, real property taxes, casualty losses, etc) other – deductible expenses attributable to the business (supplies, wages paid to others, etc) = net income from activity. Education expenses – Deductible if they or improve skills required “maintain by the individual in his employment or other trade or business” and the taxpayer must be in the “established trade or business” at the time he incurs the educational expense. (Income Tax Regs.) Not deductible if: The education part of a program of “is being pursued by him which will lead him to qualify in a new trade or business.” (Reg. The education is an undergraduate degree or taking courses generally. “college” The education expenses are travel expenses. (§274(m)(2)). Above v. Below the Line Deductions: If the employer reimburses the employee or the employee is self-employed, the employee deducts the expenses “above the line”. If the employer DOES NOT reimburse the employee, the employee deducts the expense only if included as an itemized deduction the line”. “below Expenses to Remove Architectural and Transportation Barriers to the Handicapped and Elderly (§ 190); (§ 162); Reasonable Allowance for Salaries § 162(m) denies a deduction for compensation in excess of $1 million paid to the CEO or the 4 most highly compensated
location, and the amount of time spent in the home office. If deductible, deduction limited to the gross income from use of home office – deductions that are allowable regardless of home use (mortgage interest, real property taxes, casualty losses, etc) – other deductible expenses attributable to the business (supplies, wages paid to others, etc) = net income from activity. Education expenses – Deductible if they “maintain or improve skills required by the individual in his employment or other trade or business” and the taxpayer must be “established in the trade or business” at the time he incurs the educational expense. (Income Tax Regs.) Not deductible if: The education “is part of a program of being pursued by him which will lead him to qualify in a new trade or business.” (Reg. The education is an undergraduate degree or taking “college” courses generally. The education expenses are travel expenses. (§274(m)(2)). Above v. Below the Line Deductions: If the employer reimburses the employee or the employee is self-employed, the employee deducts the expenses “above the line”. If the employer DOES NOT reimburse the employee, the employee deducts the expense only if included as an itemized deduction “below the line”. Expenses to Remove Architectural and Transportation Barriers to the Handicapped and Elderly (§ 190); Reasonable Allowance for Salaries (§ 162); § 162(m) denies a deduction for compensation in excess of $1 million paid to the CEO or the 4 most highly compensated