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Deductions (1) 2 PDF

This document contains categories of business expenses that may be deductible for tax purposes, including materials and supplies, maintenance and repairs, advertising, transportation equipment expenses, insurance premiums, miscellaneous expenses, special expenses, interest expenses, and taxes paid. It provides details on the deductibility of prepaid interest and interest paid on unpaid taxes, as well as exclusions and limitations for interest expense deductibility.

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Methly
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96 views1 page

Deductions (1) 2 PDF

This document contains categories of business expenses that may be deductible for tax purposes, including materials and supplies, maintenance and repairs, advertising, transportation equipment expenses, insurance premiums, miscellaneous expenses, special expenses, interest expenses, and taxes paid. It provides details on the deductibility of prepaid interest and interest paid on unpaid taxes, as well as exclusions and limitations for interest expense deductibility.

Uploaded by

Methly
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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improvement

(shorter)
TAXES PAID:
● Can be claimed as
deduction.

MATERIALS AND MAINTENANCE AND ADVERTISING & OTHER


SUPPLIES REPAIRS SELLING EXPENSE

-used in the business -should not add value to the OPEX FOR TRANSPO
property or prolonged its life EQUIPMENT

INSURANCE PREMIUM MISCELLANEOUS SPECIAL EXPENSE


FOR:Fire,storm,accident EXPENSE (PRIVATE SCHOOL)
and the like

INTEREST EXPENSE

INTEREST FOR UNPAID PREPAID INTEREST LIMITATION OF INTEREST


TAXES EXPENSE

DEDUCTIBILITY: DEDUCTIBILITY: INTEREST expense where


● Interest paid on interest income (subject to
UNPAID Taxes in Lump sum: final tax) earned on the other
pursuit of trade and ● Only in the payment side is reduced by 33% of
business of principal in full (for the interest income.
lump sum payment)
● Deductible in full Periodic payments: Not deductible when
● Deductible in incurred as payment to a
EXCLUSIONS: correspond with the related party.
periodic payment.
● fines, penalties and Interest on "home
surcharges on Illustration: mortgage" is not
account of taxes. Principal : 1000 deductible"
Periodic payment : 250
Prepaid interest : 100

Deductible interest expense:


Taxes paid to n 100 x 250/1000 = 25

OPTIONAL TREATMENT
OF INTEREST EXPENSE

If interest was incurred to


acquire property to use in
the business, the taxpayer

MORENO, METHLY JOY B.

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