It’s not always clear what costs businesses can deduct on their federal income tax return. According to the Internal Revenue Code, taxpayers are allowed to write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” It’s important to stress that an expense must be both ordinary and necessary and have a business purpose. An ordinary expense may be unnecessary if the amount isn’t reasonable in relation to the business purpose. Or a reasonable expense may be unnecessary if the business purpose isn’t clear. Work with us to help ensure you’re deducting all the expenses you’re entitled to deduct (and none that you aren’t).
