Itemized deductions are an optional deduction taxpayers can take on tax returns for things such as medical expenses, property taxes, mortgage interest, and charitable contributions.
When examining whether an HRA is appropriate for a sole proprietor, it’s important to look at cash flow, not just the pure tax savings.
Are HRAs always appropriate for sole proprietors? An HRA will almost always save on taxes, but maybe not as much as advertised.
Are HRAs always appropriate for sole proprietors? Usually, but not always.