A tax deductible expense is any expense that is considered “ordinary, necessary, and reasonable” and that helps a business to generate incomeTaxable ...TaxDeductibleAnyexpensethatisconsidered"ordinary,necessary,andreasonable"andhelpsthebusinesstogenerateincomeHome›Resources›Knowledge›Finance›TaxDeductibleWhatisaTaxDeductible?Ataxdeductibleexpenseisanyexpensethatisconsidered“ordinary,necessary,andreasonable”andthathelpsabusinesstogenerateincomeTaxableIncomeTaxableincomereferstoanyindividual'sorbusiness’compensationthatisusedtodeterminetaxliability.Thetotalincomeamountorgrossincomeisusedasthebasistocalculatehowmuchtheindividualororganizationowesthegovernmentforthespecifictaxperiod..Itisusuallydeductedfromthecompany’sincomebeforetaxation.AccordingtotheU.S.InternalRevenueService(IRS),inPublication535,BusinessExpenses,“Anordinaryexpenseisonethatiscommonandacceptedinyourindustry.Anecessaryexpenseisonethatishelpfulandappropriateforyourtradeorbusiness.”Anybusiness,regardlessofindustry,incursawiderangeofexpensesFixedandVariableCostsCostissomethingthatcanbeclassifiedinseveralwaysdependingonitsnature.Oneofthemostpopularmethodsisclassificationaccording.Fromstartingabusinesstomaintainingit,variousexpenseskeeptheoperationrunningsmoothly.However,manyexpensesaredeductibleandcanlowertaxliabilities.Soleproprietorscanreducenotonlytheregularincometax,butalsotheself-employmenttax.Asforincorporatedbusinesses,deductingexpenseswillenablethemtolowerbusinesstaxes.Forhome-basedbusinesses,ownerscanincludesomeexpensesoninsurance,propertytaxes,rentormortgage,electricity,andmaintenance.However,businessownersneedtokeepinmindthatallexpensesincurredwithinafiscalyearshouldbeclaimedagainsttheincomegeneratedinthatsameyear. Tax-deductibleExpensesNotallexpensesaretaxdeductible;somemayonlybepartiallydeductible.Specifically,allowableexpensesinclude:Advertising/marketing5P'sofMarketingThe5P'sofMarketing–Product,Price,Promotion,Place,andPeople–arekeymarketingelementsusedtopositionabusinessstrategically.The5P