Allowable Self-Employment Expenses
(01/01/18 -12/31/18)
The participant is eligible for the self-employment expense deduction amount when one allowable self-employment expense is verified.
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)
Income producing real estate property
Other durable goods
Interest paid on income producing property
Livestock, raw material, seed, and fertilizer
Rent or property taxes on the business property
Other documented costs not listed in Not Allowable Self-Employment Expenses
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.