Expenses


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Related to Expenses: living expenses, Operating expenses

Expenses

Costs of living or doing business. Examples of personal expenses include the mortgage payment, groceries, and gas for the car. Examples of business expenses include the cost of materials, employee salaries, and other overhead. Expenses also include unusual costs like medical bills or employee bonuses. Businesses attempt to keep costs to the lowest possible amount without sacrificing revenue. This maximizes profit. Likewise, households generally attempt (and in many cases must) keep expenses lower than household income. While business expenses are generally tax deductible, most personal expenses are not.

expenses

The cost of maintaining property or generating income.

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.
References in periodicals archive ?
An even more common problem arises when the line between capital expenses and operating expenses has been erased.
93-72 does not explain the term "substantially beyond," but does appear to acknowledge that the concepts behind the 1975 rulings are applicable to other types of medical expenses (such as tuition and fees paid to special schools).
- Expense Billing Markup - Provides the ability to automatically apply a percent markup on an expense item.
Second, as employees, most clerics can be reimbursed by their organization for business expenses without any income tax consequences as long as the reimbursement is through an "accountable plan." Reimbursements under an accountable plan are especially beneficial to clerics subject to the alternative minimum tax (AMT).
"Travel and entertainment is one of the largest controllable expenses for companies, after personnel and IT services.
Subject to certain constraints, physicians should be compensated from a pool that remains after all expenses of the business are paid.
Department of the Treasury and Internal Revenue Service issued temporary and proposed regulations under section 861 of the Internal Revenue Code, relating to the use of an alternative tax book value method for allocating and apportioning interest expense. The temporary and proposed regulations were published in the March 26, 2004, issue of the FEDERAL REGISTER, 69 FED.
The solution includes support for all expense process features, including manager approval, accounts payable review, re-submission, short pay, rejection and audit.
In the past 12 months, as beleaguered companies have had to resort to all manner of accounting legerdemain to dress up their balance sheets, more than two dozen have been criticized for a similarly liberal interpretation of the "unusual" expenses concept.
Separate accounts are established in the employee's name for health care expenses and dependent care expenses.
(Appendix tables A.I and A.2 contain detailed information on income, expenses, and portfolio composition for the years 1985 through 1991.)