Business Description
To deduct expenses for business purposes, the amount of the expense must be at least partially business-related. The allocation method varies depending on the nature of the expense. It could be time, space, or usage. It can be done in any reasonable way. For example, if you hire a maid to clean your office for a small fee, you can deduct the wages and payroll taxes. If you use the same car for both business and personal use, you can divide your driving costs between business and personal-use vehicle.For business expenses, you must determine how to report the expense. There are two general accounting methods: the cash method and the accrual method. In order to deduct the expense, you must first determine the method used to calculate the amount of the expense. You need to report the expense in a systematic way so that the IRS can understand whether the amount is a legitimate expense. The IRS has specific rules for these two accounting methods.
