| Publication Number: 535 |
| Business Expenses |
| Introduction
|
| This publication discusses common business expenses and explains what is and is not deductible. The general rules for deducting business expenses are discussed in the opening chapter. The chapters that follow cover specific expenses and list other publications and forms you may need. |
 Comments 
Suggestions
| Comments and suggestions. |
| We welcome your comments about this publication and your suggestions for future editions. |
| You can e-mail us while visiting our web site at www.irs.gov. |
| You can write to us at the following address:
Internal Revenue Service
Technical Publications Branch
W:CAR:MP:FP:P
1111 Constitution Ave. NW
Washington, DC 20224
|
| We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. |
| Important Changes
for 2001 |
| The following items highlight some changes in the tax law for 2001. |
| Standard mileage rate. |
| The standard mileage rate for the cost of operating your car, van, pickup, or panel truck in 2001 is 341/2 cents a mile for all business miles. See chapter 13. |
| Marginal production of oil and gas. |
| The suspension of the taxable income limit on percentage depletion from the marginal production of oil and natural gas scheduled to expire for tax years beginning after 1999 has been extended to tax years beginning before 2002. For more information on marginal production, see section 613A(c) of the Internal Revenue Code. |
| Third party designee. |
| Beginning with your tax return for 2001, you can check the "Yes" box in the "Third Party Designee" area of your return to authorize the IRS to discuss your return with a friend, family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to ask any questions that may arise during the processing of your return. It also allows your designee to perform certain actions. See your income tax package for details. |
| Important Changes
for 2002 |
| The following items highlight some changes in the tax law for 2002. |
| Health insurance deduction for the self-employed. |
| For 2002, this deduction is 70% of the amount you pay for health insurance for yourself and your family. See chapter 7. |
| Meal expense deduction subject to "hours of service" limits. |
| In 2002, this deduction increases to 65% of the reimbursed meals your employees consume while they are subject to the Department of Transportation's "hours of service" limits. See chapter 13. |
| Retirement plans. |
| Many changes to the tax laws for retirement plans were made by the Economic Growth and Tax Relief Reconciliation Act of 2001 that was enacted on June 7, 2001. However, most of those changes do not take effect until after December 31, 2001, and are not covered in this publication. For information about those changes, see Publication 560, Retirement Plans for Small Business, or Publication 553, Highlights of 2001 Tax Changes. |
| Maximum clean-fuel vehicle deduction. |
| The maximum deduction clean-fuel vehicle and qualified electric vehicle credit limit are lower for 2002 than they were for 2001. They will be completely phased out by 2005. See chapter 12. |
| Important Reminders |
| Photographs of missing children. |
| The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child. |
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