Tax Deductions Archives

Tax Deductions for Hobby Survives IRS Scrutiny

Fines Or Sanctions Paid To Finra Are Not Deductible

There are quite a few cases where the IRS disallowed loss deductions for “hobbies.” There are also quite a few cases where the courts have upheld the IRS’s position. These cases are decided based on the facts and how the courts interpret these facts. The facts in Main v. Commissioner, T.C. Memo. 2016-127, provide a…

Truck Stop Electrification Expenses Deductible, But Travel Expenses and Traffic Ticket Are Not

In Howard v. Commissioner, T.C. Memo. 2015-38, the U.S. Tax Court concluded that truck stop electrification expenses were deductible, but travel expenses and a traffic ticket were not deductible. Facts & Procedural History Mr. Howard was a long-distance truck driver for a Nebraska trucking company in 2009. He logged business travel for 358 days out…

Over-the-Road Truck Driver Not Entitled to Deduct Travel Expenses

In Jacobs v. Commissioner, T.C. Summary Opinion 2015-3, the U.S. Tax Court concluded that an over-the-road truck driver was not entitled to deduct travel expenses for traveling away from home since he lived in his truck. Facts & Procedural History Mr. Jacobs is a truck driver. He operated his own truck prior to 2006, worked…

Car and Truck Expenses Allowed Based on Mileage Not Actual Costs, Absent Records

In Aivatzidis v. Commissioner, T.C. Summary Opinion 2013-105, the U.S. Tax Court concluded that a professional driver could deduct expenses based on mileage, but not for actual expenses. This case provides an example of why drivers should compute car and truck expenses based on mileage if they do not have sufficient records. Facts & Procedural…

Insurance Agent Denied Depreciation Deduction For Airplane

In Brown v. Commissioner, T.C. Memo. 2013-275, the U.S. Tax Court denied an insurance salesman’s bonus depreciation deduction for his private jet as it was not placed in service in the tax year. The case highlights the highly factual nature of determining when an asset is deemed to have been placed in service for tax…

Fashion Retailers Business Expenses Disallowed as Routine Substantiation Case

In Heinbockel v. Commissioner, T.C. Memo. 2013-125, the U.S. Tax Court considered a routine substantiation case and disallowed business expense deductions for a fashion clothing retailer. This case presents an opportunity to consider how to present routine substantiation cases to the IRS and to the courts. Facts & Procedural History Mrs. Heinbockel was in the…

Using Third-Party Statistics for Tax Deductions

If you remember the time before the widespread use of personal computers, you will understand this better than others. We live in a society full of data. It’s everywhere. And it’s growing in volume, scope, and utility. The explosion of data has allowed taxpayers to produce documents, documents, and more documents. But why? Documenting business…

Moving Truck Driver Allowed to Estimate Contract Expense Deduction

In Bauer v. Commissioner, T.C. Memo. 2012-156, the U.S. Tax Court held that a moving truck driver was entitled to deduct expenses to hire contractors to load and unload his truck by estimating the amount of the expenses. Facts & Procedural History Mr. Bauer was a moving truck driver. He was hired by clients as…

Court Determines What Truck Driving Expenses Are Deductible

In Nolder v. Commissioner, T.C. Summary Opinion 2012-50, the U.S. Tax Court examined a number of different expenses incurred by a truck driver to determine which expenses were deductible. This case provides a good overview of the typical expenses truck drivers incur that are and are not deductible. Facts & Procedural History Mr. Nolder was…

Per Diem for Truck Drivers (Explained)

Truck drivers are on the road and focused on driving. They do not have access to an organized office or have time to stop and process paperwork. So they are an easier target than some other types of taxpayers. This is why truck drivers are frequently targeted by IRS auditors. Truck drivers also earn above-average…