What types of business expenses are tax-deductible?

In Illinois, certain business expenses are tax-deductible, meaning that they can be used to reduce taxable income. Business expenses include any cost that is necessary to operate or maintain a business. Common deductible expenses include employee wages, employee benefit costs, rent, office supplies, professional services, advertising expenses, health insurance premiums, and more. If an expense is considered to be a capital item, it cannot be deducted in the year it is incurred. A capital item is an asset that produces income over a period of time. Examples of capital items include machines, buildings, and land. However, these capital items can be depreciated over time, meaning that a portion of the cost can be deducted each year. In addition, some expenses can be deducted as a business loss against income from other sources. A business loss occurs when the costs of operating a business are greater than the income it generates. A business loss could be due to the unprofitable sale of goods or services. In general, an expense must be both ordinary and necessary in order to be tax-deductible in Illinois. An ordinary expense is one that is common and accepted in the field of the business, and a necessary expense is one that is appropriate and helpful. Business owners should consult with an accountant or financial advisor to determine which expenses are deductible in their particular situation.

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What types of business expenses are tax-deductible?

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