expenses (redirected from expense)

expenses

The cost of maintaining property or generating income.

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Expenses

For federal income tax purposes, expenses are divided into four categories:

Trade or business expenses,

Expenses in connection with production of income, in connection with management, conservation, or maintenance of property held for production of income,

expenses in connection with the determination, collection, or refund of any tax, and

Personal, family, or living expenses.

Expenses in the first three categories are generally deductible in determining taxable income. Expenses in the fourth category are not deductible, except in a few cases (medical expenses, charitable contributions, etc.) in which they are specifically allowed by law. Expenses are to be distinguished from "capital expenditures," defined elsewhere in this glossary.