Business Expense Deduction

Business Expense Deduction

A reduction in a business's taxable income by costs that result from having and maintaining the business. Rent and employee salaries are primary (and expensive) examples of business expenses that are qualified for the deduction. For example, if a business has $1 million in revenue and $400,000 in overhead eligible for the business expense deduction, its taxable income is only $600,000.
References in periodicals archive ?
To qualify, the purchase must be of tangible personal property or a taxable service for which a business may claim a business expense deduction or a depreciation deduction for federal income tax purposes.
Insurers also will need to consider that the new table will reduce the reserve business expense deduction on their tax returns, Luff said.
The benefits that businesses in Enterprise Zones receive include hiring credits, sales and use tax credit, business expense deduction, net operating loss carryover, and net interest deduction for lenders.
The employee would have been entitled to a business expense deduction if the property or services that were provided by the employer had been purchased by the employee; and
Indeed, one measure of their commonness is their longstanding treatment as an ordinary and necessary business expense deduction under section 162.
The IRS addressed this issue in private letter ruling 9805007, in which an employer wanted to know whether e-mail or fax communications constituted adequate documentation for a business expense deduction under IRC sections 62 and 274.
35, in which it allowed a current business expense deduction under section 162 of the Internal Revenue Code for soil remediation and groundwater treatment costs (while requiring capitalization of costs attributable to the construction of groundwater treatment facilities, which were determined to be capital expenditures under section 263).
Note: Although taxpayers may not deduct the cost of dues to these kinds of clubs, they may still qualify for a business expense deduction for the cost of business-related meals and entertainment conducted at the club.
The Tax Court allowed an ordinary and necessary business expense deduction for a portion of Newi's rent, light and cleaning bills.
Whenever a legitimate business expense deduction is denied or an additional compliance cost is imposed, the competitive position of the country as a whole is clearly diminished.
Full browser ?