BizTerm Definition
Deduction, Business Deduction
Short Definition
Business expenses which reduce net income for tax purposes
Full Definition

Business expenditures made during the normal course of conducting your business can be legitimately deducted against business income. These deductions are shown on a businesses (or personal when a sole proprietor or single-member LLCs) tax return.

The following are some the most common business deductions:

* Capital Expenditures - For purchases of capital assets

* Utilities - Cost of supporting facilities for a business

* "Startup" Expenses - Incurred before your new business gets up and running

* Travel Expenses - Those incurred during business trips

* Meals and Entertainment Expenses - Incurred when you entertain business guests

* Business Gifts - Gifts given to your business clients and customers

* Compensation and benefits for yourself and your employees

* Rent Expenses - For example, the cost of renting equipment or office space for a business

* Home Office Deduction for those with a home-based business

* Casualty Losses - Expenses incurred by those who suffered a sudden, severe loss to business assets

* Vehicles Expenses - Expenses associated with operation of cars, trucks and other vehicles when used in your business

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