What are Business Expenses?

According to IRS Publication 535, “To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.”

Common business expense reimbursements:

  • Travel – the cost of work-related travel including flights, car rentals, lodging and meals. 
  • Transportation – Mileage can also be reimbursed when you’re traveling for business (not for commuting back & forth to work).
  • Supplies – supplies that an employee purchases for the business.
  • Meals & Entertainment – meals & entertainment can be reimbursed when they can be shown to have a clear business purpose.

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