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Small business tax Q&A: December ’15

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in Small Business Tax

Miscellaneous deductions aren’t random

Q. I pay my CPA to do my tax return every year but never get a deduction. Is this possible? S.B., Sioux Falls, S.D.

A. Yes. The cost of tax return preparation services, as well as tax advice from a professional, is deductible on your personal tax return as a miscellaneous itemized deduction item. However, such miscellaneous expenses are deductible only to the extent they exceed 2% of your adjusted gross income (AGI). If you don’t clear the 2%-of-AGI hurdle, you get no deduction for miscellaneous expenses. The higher your AGI, the less likely you’ll qualify for this write-off.

Tip: Miscellaneous expenses are also subject to the itemized deduction phaseout rule that affects high earners.

Putting a dent in casualty losses

Q. We were involved in a fender-bender and didn’t make an insurance claim. Is the repair cost deductible? G.M., Jupiter, Fla.

A. Probably not. Although an auto accident ...(register to read more)

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