To determine whether you can deduct an expense, ask yourself: Is this expense both ordinary and necessary to the business? The IRS requires both elements.
- An expense is ordinary if it is common and accepted in your industry.
- An expense is necessary if it is helpful and appropriate for your business.
You can write off a wide variety of business expenses you paid during the year, including things like:
- Advertising costs
- Commissions
- Supplies
- Legal fees
- Repairs and maintenance
- office expenses
- Home Office
- Vehicle expenses
This is where good record keeping can really save you money on your taxes.
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