Internal Revenue Service (IRS) Definition of an Expense

The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’. Ordinary expenses are those costs typically incurred in your industry. Necessary expenses are those costs you must incur to fulfill your mission or purpose as a business operation.

Capital Expenditures – IRS Definition

The Internal Revenue Service uses a complex definition to identify capital expenditures (assets).  A capital expenditure is not deductible as an expense in the tax year purchased; the taxpayer or entity must use depreciation, amortization or depletion to obtain deductible value on the entity’s return.  This article is an introduction to the Internal Revenue Service’s...

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Internal Revenue Service (IRS) Definition of an Expense

The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’.  Ordinary expenses are those costs typically incurred in your industry.  So a restaurant would not ordinarily purchase vaccines.  And a medical practice would not purchase 50 heads of lettuce.  So it is important to understand the concept of ordinary.  Necessary expenses are those...

This content is for Bronze, Silver and One-Time members only.
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