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Tax Question Regarding Incentives

In summary, if you use the item for your business, you can deduct it. If it's something you would just personally use, you can't deduct it.
chefheidi2003
Gold Member
2,943
I earned a few incentives last year I usually don't am I correct that I can claim them as business expenses if I use them for my business? I just want to know so that I can optimize my return this year..LOL.
 
Yes, if you use them in your business you can deduct them. Ask your tax person how to do it.
 
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  • #3
We don't have a tax person..we use Turbo Tax at my mom's house. Thank you..that is what I thought.
 
I enter it as "extra income" then turn right around the deduct it out as a business express.
 
My accountant told me that since we don't pay for the incentives, we can't deduct it as a business expense.
 
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  • #6
Even though we did not technically go and buy these items it is showing them as "money made" on our 1099..but we got the items instead..so in a way did we not "purchase them"?
 
I talked with an accountant and he said that if it's something you would use for your business, that it's okay to put it as a deduction. But if it's something you would just personally use, that's not okay.
 
I have all the SAT deducted as Samples for my business. I use them for shows and take them for people to see. The bags and such I deduct as Advertising. Anytime I use them I am opening myself to questions of where I got it and how. My accountant agrees.
 
If it wasnt on my 1099, then I could see why I could not deduct it. But since it is on my 1099, that means I am paying taxes on it, so why shouldnt I be allowed to deduct it. I am not a tax accountant, not do I use one (Turbo tax), and I do not play one on TV. ;)
 

What are tax incentives?

Tax incentives are special deductions, credits, exemptions, or other benefits given by the government to encourage certain behaviors or activities. These incentives are typically used to promote economic growth, job creation, or other social goals.

What are some common types of tax incentives?

Some common types of tax incentives include tax credits, tax deductions, tax exemptions, and tax holidays. Tax credits and deductions reduce the amount of tax owed, while exemptions and holidays exempt certain income or transactions from taxation.

Who is eligible for tax incentives?

The eligibility for tax incentives varies depending on the specific type of incentive and the government's criteria. Some incentives may be available to all taxpayers, while others may have specific requirements such as income level, location, or industry.

How do tax incentives affect my taxes?

Tax incentives can lower your tax bill by reducing the amount of income or transactions subject to taxation. This can result in a lower tax liability or even a tax refund. However, it's important to understand the specific rules and limitations of each incentive to properly claim them on your taxes.

Are tax incentives the same as tax breaks?

While tax incentives and tax breaks both refer to ways to reduce taxes, they are not exactly the same. Tax incentives are typically targeted towards specific behaviors or activities, while tax breaks can refer to any type of tax reduction. Additionally, tax incentives are often temporary and have specific requirements, while tax breaks can be permanent or more general in nature.

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