Allowable Self-Employment Expenses
The participant is eligible for the
self-employment expense deduction amount when one allowable self-employment expense is verified.
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Self-employment income due to farming uses actual expenses and has special budgeting procedures. (See Farming) |
The allowable self-employment expenses include, but are not limited to, the following:
●Bills for cleaning costs and maintenance of business location and necessary equipment
●Business related insurance premiums
●Costs of operating machinery or equipment
●Costs of stocks or inventories
●Identifiable rent and utilities that cannot be allowed in the participant's shelter deduction, as they are associated with a business location
NOTE When rental property used in the business does not have a separate meter, utility expenses may be used to determine the cost of doing business.
●Interest and principal paid on the purchase of any of the following:
Business property
Capital assets (See
Capital Gains)
Equipment
Income producing real estate property
Machinery
Other durable goods
●Interest paid on income producing property
●Labor
●Livestock, raw material, seed, and fertilizer
●Rent or property taxes on the business property
●Salaries paid to employees, and employer paid benefits
●Taxes paid on income producing property
●Sales taxes collected and paid, when applicable
Use the
verification process to verify the expense before allowing the expense as a deduction.