12:53
holy shit @scorediot i thought you meant there was an app with a question about taiwan
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LSDefine
Simple English definitions for legal terms
business expense
Read a random definition: law department
A quick definition of business expense:
Business expenses are the costs that a business has to pay to keep running. These costs can be things like rent, supplies, and salaries for employees. When a cost is considered a business expense, it means that the business can take it off their taxes and pay less money to the government. To be a business expense, the cost has to be something that is normal and necessary for that type of business. Sometimes, a cost can be both for business and personal use, and in those cases, the court will decide how much of the cost can be deducted from taxes.
A more thorough explanation:
A business expense is a cost incurred by a business in order to operate. These expenses are tax deductible, meaning they can be subtracted from the business's taxable income. To qualify as a business expense, the cost must be:
- Ordinary, accepted, and common in the business's trade
- Necessary, appropriate, and useful in operating the business
For example, a restaurant may deduct the cost of food and supplies used to prepare meals, while a law firm may deduct the cost of legal research materials.
In some cases, an expense may be both business-related and personal, such as a cell phone used for both business and personal calls. In these cases, the court will determine whether the expense is primarily business or personal. For example, if a self-employed individual uses their personal vehicle for business purposes 80% of the time, they may deduct 80% of the vehicle's expenses as a business expense.
Overall, business expenses are important for businesses to track and deduct in order to reduce their taxable income and increase their profits.