Page 27

2026 - 2027 I PY27 NH Fuel Assistance Program (FAP) Procedures Manual 27 Instructions for Completing the Self Employment Declaration

The following is a list of specific descriptions for the allowable deductions for self-employment income:

Advertising: Costs relating to business advertising in newspapers, radio, television, leaflets, brochures, etc. are deductible, with the exception of political ads and foreign advertising.

Bank Charges: The costs of maintaining a business bank account such as monthly service charges, check cashing charges, bad check charges, etc. are deductible.

Car & Truck: There are two methods for determining deductions: actual costs and standard mileage rate. If using the actual costs method, deduct gas, oil, tolls, tires, licenses, garage rent, parking fees, lease fees, and rental fees. If a car is used for both business and personal use, multiply the actual costs by the percent of time the car or truck is used for business. For example, a car used 60% of the time for business with $2,000 annual costs would have a $1,200 deduction (60% x $2,000 = $1,200). If using the standard mileage rate, multiply the business- related miles by the current IRS rate for mileage to arrive at the allowable deduction. Parking fees, tolls, and state and local personal property taxes may also be deducted. Records must be kept showing daily business mileage and a yearly business mileage figure.

Cleaning: The cost of cleaning and janitorial services is deductible.

Fuel: Fuel costs relating to the purchase of gasoline, diesel, gasohol, etc. used for work-related equipment are deductible (refer to the Car & Truck section below for transportation fuel).

Insurance: Payments for work-related insurance premiums are deductible, including premiums for fire, theft, flood, casualty, merchandise, inventory, liability, public liability, malpractice, worker's compensation, state unemployment insurance, use and occupancy, and business interruption. Employees' group insurance is also deductible as long as the strict nondiscrimination rules are complied with.

Interest: Interest payments on business loans, business credit cards (used to purchase strictly business items), and mortgages are deductible.

Office Expenses: The cost of office supplies for business are deductible as long as they are using within one year. Cost of rent and utilities associate with business office may also be deductible.

Postage: The cost of postage and shipping for business purposes are deductible.