You can either claim the standard mileage rate for each business mile driven ($.405 thru 8/31/05 and then $.485 for the rest of the year), or base your deduction on the percentage of miles your car was driven for business multiplied by the actual costs incurred during the year. Allowable costs include gas, insurance, repairs, parking at home, and either your lease payments, or if you own your car, a factor for depreciation.

There are two tests you must meet to deduct computer equipment. The computer purchase must be a requirement of your employment as well as for the convenience of your employer. If you buy a computer so you can work at home instead of staying late at the hospital or lab, you’re out of luck. Many people find that it’s easier to deduct their computer purchases in years they have independent contractor income.

Examinations: Any time something qualifies you for a new trade or business, the cost incurred isn’t deductible. That’s why you can’t write off your medical school tuition. Costs incurred in connection with improving your skills in your current profession are generally deductible. Some of the larger deductions are claimed by people working towards an MPH or a dental specialty. Home Office Deduction: As long as you perform administrative and managerial tasks on a regular basis within a portion of your home used exclusively for business, you’re eligible for the home office deduction.

Pages: 1 2 3