Not everything is deductible

Every year I have some clients who come to me and try to deduct certain items on their income tax returns that cannot be legitimately deducted on their returns.

The taxpayer may have “heard from a friend” that a certain item was a tax deduction, or the taxpayer assumed that because items that might be similar were deductible then these specific items would therefore then be deductible. In many cases the taxpayers are convinced that they can deduct these items and are confused when it is explained that these are not deductible items.

One of the most common items that comes into this is deducting the mileage from traveling to and from your home.

Most often these are business owners who assume that all business miles are deductible. However, the miles from home to your primary business location and back home again are not a tax-deductible item. Miles visiting clients or within job sites on a particular day would be a tax-deductible item, but the miles to and from home are not deductible.

Another common misconception is that if a person sells their primary residence at a loss then this loss would be a tax-deductible loss to the individual.

However, since in most cases the gain on the sale of a primary residence is not taxable income the corresponding loss does not generate a tax deduction. Since most primary residences are sold at a gain, it is ultimately better to the taxpayer not to tax either the gain or the loss rather than taxing both.

Along these same lines is the fact that home repairs are not deductible.

There are specific exceptions for home officerelated expenses, but in general home repairs are not deductible. So, when you are getting a new roof, furnace or driveway, do not try to deduct these somehow from your individual income tax return and your preparer probably does not need those receipts.

I am sometimes asked by clients if they can deduct their time while volunteering for a not-for-profit.

While a taxpayer may deduct out-of-pocket costs including mileage related to their involvement with a not-for-profit, there is no tax deduction for the actual time involved. So, you cannot assign and deduct any value for your labor that you donate to a charitable organization.

There are a couple of items that I feel should logically be able to be deducted, but the IRS prohibits these.

One of these is my YMCA membership. Gym memberships are not deductible. I would think that these would be considered a medical deduction as they contribute to good health, but the IRS does not look at it this way.

I especially am challenged with the fact that my health club membership is not deductible as a medical expense in light of the fact that gender transition surgery is considered deductible as a medical expense deduction.

Although uniforms may be deductible as a business deduction, the IRS is pretty clear and imposes some

One of the most common items that comes into this is deducting the mileage from traveling to and from your home.

pretty restrictive rules in this area.

A police officer can deduct their uniforms and a doctor or nurse can deduct their scrubs, but a business professional cannot deduct their suits, ties and dress shirts. The “logic” is that these items could be worn outside of work. For a business person, not only can they not deduct the suits, ties, and dress shirts, but they cannot deduct the corresponding dry cleaning either. With the exception of a very occasional wedding or funeral you will not see me in a suit, and even if I did choose to wear those my clothing would not be a deduction.

When reviewing tax deductions, a taxpayer cannot always rely on common sense, or what they may have heard from a friend. Rather, the taxpayer should rely on the tax code and a trained professional as their reference point in determining whether or not a given item is a tax deduction.