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Accounting Terms
Deductible Expense
Definition
A business expense that can be subtracted from taxable income.
Overview
Deductible expenses reduce your taxable income, lowering your tax bill. Common deductions include office supplies, software, travel, and professional services.
Example
A $1,000 software subscription is a deductible expense, reducing taxable income by $1,000.
Best Practices
Track all potential deductions, keep receipts, and consult a tax professional about eligibility.
Common Mistakes to Avoid
Missing deductions
Not keeping documentation
Claiming personal expenses
Frequently Asked Questions
What expenses are tax deductible?
Generally, ordinary and necessary business expenses. Consult a tax professional for specifics.