Legal Dictionary
Main Entry:
ex·penseFunction:
noun : financial burden or outlay;
specifically : an item of business outlay chargeable against revenue for a specific period
busi·ness expense : an expense made in furtherance of one's business esp. as part of the cost of operating a business in the taxable year in which the expense is incurred —compare
CAPITAL EXPENSE and,
PERSONAL EXPENSE in this entry
NOTE: Business expenses are generally tax deductible in the year the expense is incurred.
capital expense : an expense made in a business that will provide a long-term benefit
: CAPITAL EXPENDITURE NOTE: Capital expenses are not tax deductible as business expenses but may be used for depreciation or amortization.
mov·ing expense : an expense incurred in changing one's residence that is tax deductible if incurred for business reasons (as when one's job requires relocation)
or·di·nary and nec·es·sary expense : an expense that is normal or customary and helpful and appropriate for the operation of a particular business or trade and that is made during the taxable year called also
ordinary and necessary business expense NOTE: Ordinary and necessary expenses are tax deductible.
per·son·al expense : an expense incurred in the course of one's personal affairs as distinguished from the course of one's employment or the operation of a business —compare
BUSINESS EXPENSE in this entry
NOTE: Personal expenses are usually not tax deductible.