1. How are business expenses treated in regard to tax legislation? Discuss in 30 to 50 words.

tax deductible expenses are almost any "ordinary, necessary, and reasonable" expenses that help to earn business income. Deductible expenses are those that can be subtracted from a company's income before it is subject to taxation. When it comes to what exactly is meant by ordinary, necessary, and reasonable expenses, the Internal Revenue Service (IRS) has defined these as any expenses that are "helpful and appropriate" for a business. The standard business deductionswhich include general and administrative expenses, business-related travel and entertainment, automobile expenses, and employee benefitsare outlined in Section 162 of the Internal Revenue Code. Some expenses are considered "current" and are deducted in the year that they are paid, while others are considered "capitalized" and must be spread out or depreciated over time. There are a few business expenses that are specifically prohibited by law from being deductible, even though they may be used by the business to earn income. These include such things as a bribe paid to a public official, traffic tickets, the clothing one wears for work unless they are a required uniform, and expenditures deemed to be unreasonably large (like a corporate jet for a small retail business to use in visiting a few suppliers