While the IRS allows entrepreneurs to deduct a number of business expenses, for better or worse some expenses simply aren't deductible. The list below covers a handful deductions that generally will not be allowed, however, this page is not an all inclusive list. Refer to our detailed deduction pages, your tax advisor and to the IRS to find out if your specific expenses can be deducted.
Mercedes is an Uber driver who regularly speeds while in route to pick up her next customers. Last year she received three moving citations totaling $900. Mercedes assumed that since she received the tickets while working, the tickets would be deductible on her Schedule C. Unfortunately for Mercedes, the $900 of fines will not be deductible since she received the citations because she broke the law.
Number Cruncher, CPA is a sole proprietor accountant who has a client running for political office. Number Cruncher contributed $10,000 to his client's campaign, since her election would give him the ability to directly influence tax policy, which would almost certainly result in more business for him. While Mr. Cruncher is allowed to contribute to whatever political campaigns he chooses, he is not allowed to deduct the $10,000 contribution on his Schedule C even though the expenditure could be considered a legitimate business expense.
Paula is landlord with a rental property in Miami, Florida. Last year Paula wanted to make some renovations to her rental property, however, she quickly found the permitting process to be daunting. Paula paid a city official $500 to quickly move her permit requests through the system. Even though this expense is related to her rental activities, since it is an illegal bribe it cannot be deducted when Paula prepares her Schedule E.
Aurora is a public speaker who recently traveled to Barbados with her husband to celebrate her 5th wedding anniversary. While on vacation she brought along her laptop and spent a few hours working on an upcoming presentation. Aurora would like to deduct her trip as a business expense since she worked some while away. When Aurora mentioned this idea to her accountant, he informed her that the IRS would not allow her to deduct her Barbados trip since she took the trip primarily for personal purposes.
Queen owns a second property that she rented through Airbnb last year on a full time basis. This year, she let her oldest son, a college student, stay in the home for free while attending school. During the year, Queen incurred $5,000 of repair and maintenance expenses on the home. Even though she previously rented the property, she would not be able to deduct any of the $5,000 of repairs since the house was used for personal purposes during the year.
