Accounting terms

Dictionary of all accounting terms

What is Deductible Expenses?

Deductible expenses are almost all expenses that allow your business to earn revenue. Deductible expenses can be subtracted from the company's income before it is subject to being taxed.

Deductible caveats

Not all business expenses are created equally. For example, Internal Revenue Service or IRS defines deductible expenses as "ordinary, necessary, and reasonable". The expenses claimed as deductible must be helpful and appropriate for your business.

What is a business deductible expense will vary from country to country, so be sure to assess local laws and regulations in this regard.

Possible deductible business expenses

List of legitimate deductible business expenses can be lengthy. Here are a few possible business expenses that can be deducted from your tax burden -

  • Rent of the premises in which your business operates in;
  • Salaries;
  • Equipment and supplies;
  • Legal and accounting services;

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