Deduction for Investment Interest

Taxpayers often borrow money in order to buy property held for investment. The deductibility of this interest is not permitted if the property yields tax-exempt income. Even if the income from the investment is taxable, the amount of any interest deduction is limited by to the taxpayer's net investment income, which is defined by tax laws as the excess of investment income over investment expenses.

Self-Employment Taxes

If you work for yourself, you are usually required to pay a self-employment tax, which is a combination of Social Security and Medicare taxes. It is very much like the Social Security and Medicare taxes withheld from the wages of most employees.

Credit Card Annual Fees

If you are a taxpayer who uses a credit card for business purposes, you might be tempted to deduct as interest the annual fee charged to your account under the terms of the credit card agreement. However, the Internal Revenue Service would disallow that deduction.

Work-Related Education Expenses

If you are an employee, you may be able to deduct the costs of qualifying work-related education, but only if you itemize instead of taking a standard deduction. The deduction allowed would be the amount by which your work-related education costs plus other job and certain miscellaneous expenses exceed two percent of your adjusted gross income. If they don't exceed this floor, no deduction is allowed. If you are self-employed, you may deduct the costs of work-related education directly from your self-employment income.

Capitalization of Motion Picture, Master Recording, and Video Expenses

If you are the producer of a movie or sound recording, you already know that you spend a lot of money before your creation is ready to earn some money. The question is how you handle all of those incurred expenses for federal income tax purposes.