Expenses not allowed as a cost of producing self-employment income are as follows:

1. (A) Payments on the purchase price of income producing real estate and capital assets, equipment, machinery and other durable goods. Interest payments are deductible;
2. (B) Net losses from previous periods of time;
3. (C) Federal, state and local income taxes, money set aside for retirement purposes, and other work-related personal expenses (such as transportation to and from work). These expenses are accounted for by the 20% earned income deduction; and
4. (D) Depreciation.