Is KVS or EF subscription Tax Deductible?
 

Mods, please move to appropiate forum if you deem so, since I don't know where this question belongs.

Title say's it all for me. I travel extenisvely about 98% company travel. I wonder if you can claim a tax deduction for the subscription amount because it does offer you time and money saving routes that the airlines website may not give you.

Just your thoughts please.

If you're self-employed, I'd say yes.

If you're an employee, and your employer won't reimburse you for them, these would fall under the category of "employee business expenses." Those are deductible only to the extent that they exceed 2 percent of your adjusted gross income - but if you meet that target, put these in too.

An audit over this is nearly inconceivable. If you're audited for some other reason, and they end up looking at this, they might throw it out but I don't think they would.

(I am not a tax accountant. This advice is worth at most what you paid for it.)

The IRS says, “To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.” (IRS Pub. 535)

In my layman opinion I would say yes, you could deduct it.

As a CPA, my gut is yes but I don't do taxes. Chances of you being audited and the deduction disallowed are pretty slim.

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It's definately tax deductible as a business expensive. If you are simply an employee then it generally isn't tax deductible. The 2% standard mentioned above may be correct but I can't verify it one way or the other.

When in doubt....deduct it! Worst case scenario you can be made to pay it back later. It's an interpretation of the law. You won't violate any laws. However, if you are in doubt about reporting income....report it! Failure to report your proper income is tax fraud.

Note: This post is for discussion reasons. Always consult competent professional advisers. I am not an attorney or CPA nor do I play one on the internet. :p I have, however, been running my own business since the age of 14.

That part is correct. I'm quite certain of it.

Tax fraud is not limited to underreporting income. Claiming an improper deduction can be fraudulent as well. One of the activities listed on the IRS "General Tax Fraud" page is "claiming personal expenses as business expenses." Others include "overstating the amount of deductions" and "claiming false deductions."

Specifically, fraud in this context has been defined as "deception deliberately practiced to secure unfair or unlawful gain" or "intentional misrepresentation of truth in order to obtain something of value by inducing another [here the IRS] to rely upon false information." The element of willful deception must be present - that is, you have to have known something was false and said it anyhow. Here, even if the IRS feels the expense is not deductible, there is a reasonable basis for a taxpayer to have thought it would be. Therefore, no fraud.

In this specific case, I think a case can be made that these expenses are reasonable if the subscriptions were bought to facilitate business travel. The possibility that the subscriber might enjoy them does not change this, any more than the IRS requires meals on business trips to taste bad. (That they often do is a separate issue; as far as the IRS is concerned, they don't have to.)

Always a good idea.