Updated
Most missed deductions are not exotic. They are ordinary business expenses whose record ended up somewhere you were not looking.
Where deductions hide
The charge that was really a work trip. A flight, a hotel, a few meals and a rideshare look like a holiday on a statement. If the trip was mainly for business, its travel costs may be business expenses. See business travel deductions and trips that were part business, part personal.
The expense paid in cash. Parking, a tip, supplies from a market stall. There is no statement line, and often no receipt unless you kept one. A written note made at the time helps. See lost receipts.
The cost that never shows up as a single charge. Business use of your car is a count of miles, not a purchase; driving between home and a regular place of work is commuting, not business mileage. A space at home used regularly and only for your work may be a share of rent or mortgage interest and the household bills. See the mileage and home office guides.
The record in another inbox. The software subscription billed to a personal address. The conference receipt in an old work account. The invoice you paid by bank transfer, explained only in an email thread. See finding receipts in Gmail.
Whether a cost is business also depends on your work. The same subscription can be a work tool in one trade and personal in another. See write-offs by profession.
How to look back at last year
- Gather every statement for every account you paid work costs from, for the whole year. Note any month that is missing.
- Read each one for business expenses you did not report, and write down what each was for.
- Add the costs that never appeared as a charge: business miles, the home-office share, cash.
- Match each one to a record: a receipt, an email, a calendar entry, a written note. See what a receipt must show.
- Compare the list with what was on your return.
A return already filed is changed with Form 1040-X. To claim a refund, it generally has to be filed within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later (IRS). A return filed early counts as filed on the April due date.
When to ask your CPA
- Before you amend. Whether an expense counts, in what amount, and whether amending is worth it depends on your situation.
- When an expense was part business, part personal. A trip, a phone, a car. The split is a judgement call.
- When a record is missing. A missing receipt does not mean the expense did not happen, and your CPA can tell you what other evidence would do.
For the common categories, start with self-employed tax deductions.
How Amy approaches it
Send Amy the records you already have, by text, email or the web. She finds your likely business expenses, including the ones that are easy to miss, tells you which records are missing, and asks only what she can't work out.
You review and confirm. Your CPA sees where every number came from and decides what to claim.
