To be deductible, business expenses must be appropriate and helpful for generating a profit.

Question

Quizplus · Accepted Answer

This is a fundamental principle of tax law. The IRS allows businesses to deduct expenses that are ordinary and necessary for their trade or profession, and which are incurred in the pursuit of generating a profit. However, expenses that are personal, extravagant, or not directly related to the business are not deductible.

To Be Deductible, Business Expenses Must Be Appropriate and Helpful