Brettonwood Advisors, Inc

A tax deduction isn’t the same as a business expense.

A business expense is an expenditure – money leaving your business – to serve a business purpose. After all, it takes money to make money!

A tax deduction is what a government entity – Federal or State – allows you to deduct against your business income.

For example, you may wine and dine a client or prospect, but the IRS may only allow you to deduct up to 50% of the cost of that meal.

Or, you may take a client for a round of golf and talk about business the entire time, but the IRS may not allow you any deduction because entertainment is no longer deductible.

A properly documented business expense may or may not be deductible depending upon the wishes of the tax agency in question.