Ordinary expense - common expense for any trade of similar nature .
Necessary expense - inevitable for handling particular business.
Business expenses are considered deductions.
Fully deductible expenses
Employees pay, retirement plans, contract wages, employee benefits.
Marketing expense, credit card process fees, license and regulatory fees.
Equipment rentals, office lease, utility expense, rent expense, maintenance cost.
Insurance, taxes, rent expenses, legal fees.
Gifts - To clients or customers - deduct all or part of the gift cost. Upper cap of $25 applicable on business gifts. Indirect gifts is a gift given to a customer family or client family.
Meal and Entertainment - cannot deduct entertainment or recreation; however you can deduct: (new tax regulation increase business meal deduction for food and beverage) can deduct 50% of meal charge you or employee takes, if it isn't considered lavish. Recreation for employees. (picnic) entertainment sold to customers. (fashion designer)
Note: IRS allowed deductibles:
Home mortgage interest
Personal property tax
Investments
Medical expense
State and local taxes
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