Deducting the Home Office - Deducting all or...
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1. Deducting all or most of the cost and operation of a personal residence.
For example, placing a calendar, file cabinet and telephone in every room
does not increase the amount of the home space that can be deducted.
2. If the business is not real, deducting any portion of the total home
mortgage or rent is not allowed.
3. Paying children a salary for services, such as answering telephones,
washing cars, running errands and other such tasks and then deducting
their salaries as a business expense is not a legal deduction.
4. Deducting educational expenses from the salaries wrongfully paid to
children as employees is also not acceptable.
5. Excessive car expenses when the vehicle has been used for both
business and personal matters are a common deduction that are not
6. Operating under the mask that “everyone is a potential client” does not
allow for deducting personal travel, meals and entertainment.
The IRS has also seen a number of illegal schemes that instruct employers not to
withhold federal income tax or other employment taxes from wages paid to their
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