Which Expenses Are Deductible in 2020

Understanding what expenses can be deducted can be complicating. For instance, you can deduct business expenses, but they have to be ordinary and necessary. Anything that is not deemed by the IRS as “ordinary” and “necessary” may raise a red flag. This is why before filing 2020 tax returns, it’s important to study all of the expenses allowed and use them correctly.

Medical Expenses

Alcohol Abuse Treatment

Inpatient treatment at a therapeutic center is deductible. This includes meals and lodging, as long as it was provided by the center.

Fertility Enhancement

The costs for in vitro fertilization, including egg and sperm storage.

Surgery to improve the chances of conceiving, which includes reversals to operations that prevented someone from having a baby.

Guide Dog and Service Animals

The costs of buying, training and maintaining this type of dog. The dog must be for someone who is visually impaired, hearing disabled, or has another type of physical disability. Maintaining costs include food, grooming, and veterinary care.

Stop Smoking Programs

The cost of the program can be deducted, but not the medication often prescribed for smoking cessation. Examples are nicotine gum and patches.

While the above are deductible, the following medical expenses are not:

● Weight Loss Programs

● Nonprescription Drugs and Medicine

● Health Club Dues

● Cosmetic Surgery

Miscellaneous Deductions

Miscellaneous deductions are ones that most people do not know about, and are a great surprise to them. Check out the following miscellaneous deductions to see if any of them apply to you.

Gambling Losses

If you’ve lost money gambling, you can deduct it. Travel expenses for gambling activities are also deductible.

Casualty and Theft Losses on Income Property

The cost of the damage to an investment property or the cost of stolen items can be deducted. The property includes residences, but also stocks, bonds, gold, silver, and more.

Federal Estate Tax for a Decedent’s Income

If a deceased individual didn’t properly include income on the final tax return, it is possible to deduct the gross income the deceased would have received.

Fines and Penalties

Fines paid to the government for breaking the law are not deductible, but there are:

● Restitution

● Money to come back into compliance with the law

● Due taxes

● Court orders in which the government is not part of

Home Office

A home office deduction can be used if it is regularly and exclusively used for business.

Club Dues

This one is tricky because not all club dues can be deducted. The following are some of the most common ones that people wonder about when want to deduct them.

● Chamber of Commerce

● Real Estate Boards

● Trade Association

● Civic or Public Service Organizations

● Business Leagues

● Boards of Trade

Ponzi--Type Investment Schemes

Any losses from these types of schemes on an income-producing property can be deducted.

What Cannot Be Deducted

The following nondeductible expenses are ones that many people think can be, so be sure to pay special attention to them.

● Unreimbursed Employee Expenses

● Campaign Expenses

● Commuting Expenses

● Fine and Penalties - Law Breaking Costs

● Lobbying Expenses

● Club Dues

● Political Contributions