Dr. Friday explains what qualifies as a legitimate business expense and highlights common misconceptions. She warns against claiming personal trips as business expenses without proper justification, as the IRS scrutinizes such deductions.
Transcript:
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Business expenses. What really is a business expense? Probably the biggest thing that people think about for a trade or business is something that it takes for you to actually do your business. So I have sometimes people that will say they’re real estate agents, and then they say that they’ve taken four trips to other states or other countries to possibly look at real estate, but yet they don’t actually own or have even licenses in those states. Keep in mind, the government isn’t quite that gullible, right? So make sure that it’s a necessary expense, not just something you want to take as a family vacation.
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