What is Ordinary and Reasonable?
2018 – 11/26 Taxpayers can generally deduct the ordinary and reasonable, bona fide costs that are part of doing business, but the costs must be supported. In one case, the IRS found that a married couple wasn’t entitled to deduct payments made to the husband’s assistant, even though they might have been business expenses. Reason: They failed to substantiate them. The U.S. Tax Court agreed, and also found that the husband had failed to provide proof for car and truck expenses, and the couple may have already deducted them in connection with the wife’s work. (TC Memo 2018-190)