...
Posted in Tax Deductions Q & A
Both comments and pings are currently closed.
(Disclaimer: Some posts are user derived / user submitted / views found around the web. So some views expressed on this website do not necessarily reflect the views of the owners of
BusinessTaxDeductions.net Copyright 2010,2011)
Because the law says you can. For business deductions, you aren’t taxed on your costs from making the income. And for the personal ones, there are some itemis that Congress has decided people should not be taxed on, so if you spent money on those itemis you can deduct them. For example, to encourage home ownership, Congress allows you to deduct property taxes and mortgage interest.
Dear J: Great question and one could write volumes on this subject. I believe most of our tax laws are written for a particular reason. Personal exemptions (deductions) are probably given as a token to those people who do not have any other deductions and thus fair to them. The business deduction is a reward for those who take some risk and then are rewarded with a deduction. If the personal deduction were eliminated for everyone wouldn’t that also be fair? We reward people who send their children to college and we give many deductions for just having children. Fair?? You tell me!
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
Who knows? They can lead to some pretty crazy results. You can trace lots of strange stuff back to odd tax deductions. The housing boom is an obvious example, but the rise (and fall) of the three-martini lunch was very much a tax-related issue.