Wednesday's tax tip

I receive lots of questions about items that are deductible against business income. The IRS deems any expense that is "ordinary and necessary" as a deductible expense.

What I usually tell clients is that any expense you incur with the intent to generate income is going to be deductible to you in some manner. My goal is get people to develop peoples' antennae for identifying deductible expenses.

So if you use your cell phone for business purposes, keep record of it; you buy a prospective client a gift, keep record of it; you drive to the office supply store for business supplies, keep track of it.

Some expenses such as cell phones, computers, etc. have personal usage limitations related to them but the point is still the same; keep track of those expenses.

What if I am an employee? The same rules apply, expenses such as union dues, unreimbursed mileage, professional licenses, uniforms, special shoes, etc. Again, are all deductible employee business expenses.

I think that often too many expenses incurred by taxpayer's are never deducted simply because the taxpayer never thought about them being deductible. So let's start keeping track of those now.