July 17, 2025
For the self-employed individual operating as a sole proprietor and filing a Schedule C, the ability to legally reduce taxable income through business deductions is a cornerstone of financial management. However, this benefit comes with a significant responsibility: the absolute requirement to substantiate every claimed expense. The Internal Revenue Service (IRS) operates on a framework of principles that every deduction must satisfy. Understanding these foundational concepts is not merely an academic exercise; it is the prerequisite for building a defensible and compliant tax record. These principles form an interconnected gauntlet that every potential deduction must successfully navigate. A failure to adhere to one principle often precipitates a violation of another, creating a cascade of compliance issues that can unravel a tax return under scrutiny.
Disclaimer: The content of the infographics is provided for general informational purposes only and is not intended to constitute legal, tax, accounting or other professional advice. You should not act or rely on any information herein without seeking the guidance of a qualified professional who is fully aware of your individual circumstances. Neither the author nor the publisher assumes any responsibility for errors or omissions or for outcomes related to the use of this information.