Business expenses(Deductible)

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.

1. 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.

2. 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