Question

Sonny incurred the following expenses last month in his self-employment business: Khaki pants and a blue button-down shirt to wear to work; tuition for a course in marketing to improve his current job skills as a fashion designer; and groceries so that he could take his lunch to work. Which of these expenses is/are deductible business expenses?

Answer 1

Answer:

The correct answer is: button-down shirt to wear to work; tuition for a course in marketing to improve his current job skills as a fashion designer.

Explanation:

Deductible business expenses are those expenses that can be deducted from the income of the business before it is subjected to taxation.

These are the expenses incurred in the ordinary course of business. These expenses are part of the income statement. They are deducted from total revenue to arrive at the taxable income of the business.

The personal expenses of the business owner are not considered as business expenses. Here, the expenses on clothing and grocery are personal expenses. While expenses on tuition for a marketing course is a business expense.

Answer 2

Answer:

Tuition for a course in marketing is deductible business expense

Explanation:

There are a few expenses related to business that a self-employed could claim deductions on. Some of these expenses are cost of meal and travel expenses fore business purpose.

One such deductible expense is tuition fees incurred on a course to hone current job skills. Tuition fees incurred on attending a course that is not related to current business is not deductible.

Groceries to prepare lunch and clothes bought to wear to work are considered personal and not business expenses and so are not deductible.