What Business expenses can I deduct?
This is one of the most asked questions during tax season. Below is a quick summary to help business owners understand what expenses can be deducted.
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incurred it. In some cases, you may not be allowed to deduct the expense at all. Therefore, it is important to distinguish usual business expenses from expenses that include the following.
The expenses used to figure cost of goods sold.
Capital expenses.
Personal expenses.
See below is a list of common expenses that qualify for deduction
If you need further guidance about this contact us!
Also, more information can be found on the IRS website Publication 535 (2022), Business Expenses | Internal Revenue Service (irs.gov)