Properly Deducting Book And DVD Expenses On A Tax Return

Reading books and watching DVDs are not always leisurely pursuits. Investing the time in watching an instructional DVD or reading a non-fiction book could increase your knowledge in a variety of subjects. Perhaps the knowledge you gain proves extremely helpful in the performance of your job. By the way, anything purchased for legitimate business-related purposes is viable as a tax deduction. Claiming tax deductions on DVDs and books, however, does require a little extra accounting work in order to defuse any skepticism on the part of a tax examiner.

Turn Books and DVDs into Tax Deductions

As long as the book or DVD purchased is directly related to your business endeavors in some way, a door is potentially opened towards taking a tax deduction. A gray area could exist, though. Just because you sell cars for a living does not automatically mean any book about cars is automatically tax deductible. 

Generally, it is best to draw a direct connection between purchasing books or DVDs with demonstrable examples of their specific use in conjunction with your business. A car dealer who buys a book on how to make a better sales presentation is not likely to be questioned. A book on collecting vintage autos, however, might be dismissed in an audit.

Log the Use of the Books/DVDs

To reduce the chances of deductions being stricken in an audit, log the exact way a business endeavor correlates to a purchase. The following are possible examples of viable correlations:

  • A series of books are purchased by a home improvement professional in anticipation of specific trends emerging in the field.
  • A personal trainer purchases several workout DVDs and then integrates the material from the videos into sessions with clients.
  • A service provider buys a series of books on internet marketing strategies and then launches a social media and blogging campaign.

Of course, prior to filing a return, you submit the log entries so a certified public account so a return can be prepared properly and with less of a chance of an audit.

Note Percentages in the Listing  

One way an accountant helps is through providing more details on the return. Hence, fewer questions about the legitimacy of the deductions are raised.

Instead of listing the costs spent on books and DVDs in lines related to supplies on a Schedule C, it might be best to put the purchased of books and DVDs in "Section V - Other Expenses." Rather than just list "book purchases," you could write "35% of annual book purchases - business related." Another line could be for DVDs.

Clarity, by its very nature, eliminates confusion. If a return is flagged for examination, the additional clarity might lead to the decision not to audit the return. Contact a company like Carmines Robbins & Company PLC for more information.