Business Deductions

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Need Some Deductions for 2012?

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10 Oddball Tax Deductions

11 Most Overlooked Tax Deductions

Updated for 2012

What is a Tax Deduction? 

IRS rules state that a business expenditure is deductible if it is an "ordinary and necessary" expenditure required for the conduct your business. Deductions are business expenses that are subtracted from business gross revenue. The difference is either a net profit or net loss.

Net profit is subject to income taxes. If you're self-employed, a net business loss is classified as an ordinary loss which is fully deductible against any other items of income reported on your personal tax return, such as interest income, wages from a job earned by you or, if you're married, your spouse's wages.

The value of each deduction depends on your tax bracket. For example, if you're in the 25% tax bracket, a $1,000 deduction will slash your tax liability by $250 (25% x $1,000).

There are a many valuable business deductions. The most common ones are listed in the menu to your left. Many of them are often overlooked by taxpayers, costing them hundreds, even thousands of dollars.

Become familiar with them. Even if you don't take the time to learn how each one works, just being aware that they exist will help ensure none of them are overlooked by your tax preparer.

Check out IRS Publication 535 - Business Expenses