Is there a general rule of thumb to follow for knowing what qualifies as a business expense that is deductible?

Asked about 2 years ago - Portland, OR

I am new to running a business. I know most business expenses are deductible. But is there a general rule of thumb to follow for knowing what is or isn't business expense deductible?

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Attorney answers (3)

  1. Jay Bodzin

    Contributor Level 20

    6

    Lawyers agree

    Answered . This is more of a question for an accountant than a lawyer. The general rule is that all 'ordinary and necessary' business expenses are deductible. The IRS has published an article on this question, available online at
    http://taxes.about.com/gi/o.htm?zi=1/XJ&zTi=1&s...

    If you have specific questions, you should ask your accountant.

    Nothing posted on this site is intended to create an attorney-client relationship. Each case is unique. You are... more
  2. Robert Adam Meyers

    Contributor Level 11

    3

    Lawyers agree

    Answered . In substance, I basically agree with Mr. Bodzin's answer. I'll just add that [1] if you aren't inclined to hire an accountant or a tax lawyer to parse over your specific expenses, you can buy business tax software that will walk you through the types of expenses that are deductible, and [2] while you're trying to figure out what's deductible and what probably isn't, be sure to save all of your receipts!

  3. John J Christianson

    Contributor Level 6

    1

    Lawyer agrees

    Answered . As mentioned above, business expenses that are "ordinary and necessary" are generally deductible. A good discussion of this standard is available at: http://taxguide.completetax.com/text/Q13_2512.asp.

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