Business Expense
A cost incurred in the ordinary course of running a business. Deductible business expenses reduce taxable income.
Business Expense Definition
A business expense is any cost that is ordinary (common in your industry) and necessary (helpful and appropriate for your business). The IRS uses this two-part test to determine if an expense is deductible.
Common Business Expenses
Capital Expenses vs. Operating Expenses
How to Track in QuickBooks
Every expense should be categorized to the correct expense account. Use bank feed rules to auto-categorize recurring expenses. Your P&L report organized by category IS your expense summary for tax time.
FAQ
Q: Can personal expenses ever be business expenses?
A: Only the business-use portion. For example, a phone used 70% for business — 70% of the bill is deductible. Keep documentation of the split.
Related Terms
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Related Terms
Earned revenue is income that your business has legitimately recognized by delivering goods or services to customers. It's revenue you've actually "earned" through performance, not just money you've collected. On accrual basis, earned revenue appears on your P&L when the work is completed, regardles
A bank feed is an automatic connection between your bank account and your accounting software that imports transactions in real time (or near real time). Instead of manually entering every deposit and payment, the bank feed pulls them in for you to review, categorize, and match to existing records.
The general ledger (GL) is the master record of all financial transactions organized by account. Every debit and credit from the general journal and specialized journals ultimately lands in the general ledger. It's the backbone of your accounting system and the source from which all financial statem
Break-even is the point where your business's total revenue equals its total costs — you're not making a profit, but you're not losing money either. It's the minimum amount of sales you need to cover all your fixed and variable expenses. Anything above break-even is profit; anything below is a loss.
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