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Rejected Shop purchases tax deductible?

November 09, 2014 07:36PM
If I purchase an item for a shop, and it is rejected, would I be able to claim the cost of the item as a business expense?

Thanks for reading! I did a search for tax questions and couldn't find an answer to this.
I'm trying to decide if I should do a high dollar shop with a reimburse.
I don't anticipate a rejection, but I'm trying to cover all of my bases before I decide to go all-in!
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November 10, 2014 12:00AM
Yes you can claim the expense even if the shop was rejected to the extent of the reimbursement. You might want to try returning the item though.

Edited 1 time(s). Last edit at 11/10/2014 01:02AM by jpgilham.
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November 10, 2014 02:32AM
Catregen, if you're talking about that $300 handbag, I think that might not fly with the IRS. It has to be reasonable business expense and you might get some blowback on that. Keep in mind nothing we tell you here will hold up. Even if you call the IRS and someone tells you something, that won't hold up either. The only thing that matters is whether they take issue with the expense and what their ruling turns out to be.

It would be best not to buy that handbag unless you want to pay for a $300 handbag. Even if you are not reimbursed and are able to deduct it, you will not be able to deduct $300 from your taxes. You will only be able to deduct $300 from your taxable income, so if you are in a 20% bracket your tax savings would be $60.00 and your out of pocket actual outlay would be $240.00 after your tax advantage.

Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.
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November 10, 2014 05:37AM
Mdavisnowell-
I love the straight talk!
You're right- I'm the only one who can make this call, after I talk with my husband.
I'll update on the experience, if I decide to do it.

Thanks for all the advice! It really has been priceless!
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November 10, 2014 02:42PM
The last time I saw a $300 handbag shop, it was reimbursed ONLY if you then mailed the handbag to the MSC. Time to read the fine print?

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.
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November 14, 2014 04:44AM
You can deduct the cost of the item you had to buy, but as others have pointed out, you are better off to return the item.

I do not suggest that strategy if what you had to buy was a Big Mac. smiling smiley

Also remember, your mileage remains deductible too.

Time to build a bigger bridge.
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