What Are Tax Deductible Business Expenses?

In general, “ordinary and necessary expenses” paid or incurred during the taxable year in carrying on a “trade or business” are deductible on Schedule C of a tax return or on a business return such as a corporate return, IRS Form 1120. The definitions are fairly common-sense: “Ordinary” means common and accepted and “necessary” means appropriate and helpful.

In some instances, the IRS may assert that, although an expenses is ordinary and necessary, certain activities, e.g., gambling, do not typically rise to the level of a “trade or business” and, therefore, the expenses are not “business” expenses […]