FEDERAL TAXATION RESEARCH
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dependent exemptions. The child tax credit, however, remains effective. Among the notable deductions that the TCJA eliminated include:
i.
Moving expenses ii.
Alimony
The deductible amounts for mortgage interests and state and local taxes were limited. Expenses regarding tax preparation, investing, and hobbies are not deductible under the new law. The TCJA included gambling expenses among deductible expenses and also raised the charitable donations threshold (CFI, 2020). Business Deductions
Business deductions are applied against business expenses which facilitate profit-making.
It is required that business expenses be both necessary and ordinary to qualify for deductions (IRS, 2020). Necessary business expenses are helpful to the business, while ordinary business expenses are common and accepted in the specific business. Sole proprietors, LLCs, partnerships, and S corporations can have business deductions (IRS, 2020). Business expenses can either be fully deductible or partially deductible. Some of the fully
deductible business expenses include specific legal fees, insurance costs, advertising expenses, marketing expenses, regulatory and license fees, maintenance and repair expenses, office supplies, utilities, employee benefit programs, and employee training costs. There are cases where a business owner can use personal assets for business purposes, such as a car. In such cases, the mileage used for business expenses is deductible. Meals provided to employees are deductible up to 50% (IRS, 2020). Since business taxation entails more than personal taxation, it is crucial for businesses to keep detailed and updated records of their expenses with the help of an accountant. Employing
