Tax Code Section 162

Trade or business expenses.

Tax code section 162. A taxpayer s costs of commuting between the taxpayer s residence and the taxpayer s place of business or employment generally are nondeductible personal expenses under 1 162 2 e and 1 262 1 b 5 of the. Code section 162 m will limit the deduction that covered companies may take for annual compensation paid to any individual who served as the ceo or cfo at any time during the taxable year and the three other most highly compensated officers other than the ceo and cfo for the taxable year. 1954 as added by subsection a shall apply to all taxable years to which such code applies.

For more detailed codes research information including annotations and citations please visit westlaw. It concerns deductions for business expenses. If an expense is not deductible then congress considers the cost to be a consumption expense.

Findlaw codes are provided courtesy of thomson reuters westlaw the industry leading online legal research system. Section 162 a of the internal revenue code 26 u s c. Law and analysis section 162 a allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.

A 162 executive bonus plan allows a business to provide life and or disability income insurance to key executives using tax deductible dollars. Section 162 f of the internal revenue code of 1986 formerly i r c. 162 a is part of united states taxation law.

Overview of section 162 m section 162 m which became effective in 1994 provides that a publicly traded corporation may not deduct compensation in excess of 1 million per year paid to any covered employee of the corporation. Insurance policies are owned by the executives and are paid for through cash bonuses to the executives. Before the tcja was enacted in december 2017 the deduction limitation.

Trade or business expenses on westlaw. 162 a 1. Internal revenue code 162.