Financial advisors serving business owners likely know the basics about business expense deductions, particularly that such deductions are allowed only for “ordinary” and “necessary” expenses paid or incurred in connection with an individual’s trade, business or profession.
Under the law, an expense is considered to be “ordinary” if it is one that is commonly incurred in the trade or occupation of the taxpayer. An expense is “necessary” if it is found to be appropriate or helpful to the taxpayer’s business or occupation.
Among the common expenses in this category are employees’ salaries, office rent, interest on business loans, the cost of supplies and utilities, traveling, entertainment, advertising and automobile expenses.
Beyond this basic framework, however, lies a web of additional rules and requirements. Advisors seeking to win and serve affluent business owners can stand out by demonstrating their knowledge about business deductions and related tax topics.
To that end, ThinkAdvisor presents its latest Tax Facts Quiz, focused on essential business tax concepts. Only the tax-savviest can ace the test, but all advisors can benefit from the refresher.
Want more tax-focused insights? Find current and accurate answers to your tax questions with Tax Facts.
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