Business Expense Deductions Explained

IRC Section 162 Explained: What Does “Ordinary and Necessary” Mean for Business Deductions? | CPA Cafe Ever wonder what the IRS means by “ordinary and necessary” for business deductions? Section 162 of the Internal Revenue Code allows you to deduct expenses that are both ordinary — meaning common and accepted in your industry — and necessary — meaning helpful and appropriate for your business. The expense doesn’t have to be absolutely essential, but it should be reasonably connected to earning i