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

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

Posted

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&sdn=taxes&cdn=money&tm=60&f=00&tt=13&bt=1&bts=1&zu=http%3A//www.irs.gov/publications/p535/ch01.html%23d0e613

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 advised to have counsel at all stages of any legal proceeding, and to speak with your own lawyer in private to get advice about your specific situation. <br> <br> Jay Bodzin, Northwest Law Office, 2075 SW First Avenue, Suite 2J, Portland, OR 97201 | Telephone: 503-227-0965 | Facsimile: 503-345-0926 | Email: jay@northwestlawoffice.com | Online: www.northwestlawoffice.com

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Posted

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!

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Posted

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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