Deductibility depends on the context

There’s seldom a single answer as to whether a deduction will be considered ordinary, necessary and reasonable for your business. It depends on factors like whether most other businesses in your field typically deduct it, why you need to use this and how it helps in running your company or providing the products or services you deliver.

Let’s say you want to know if it’s legitimate for you to deduct the cost of dog treats as a business expense. Well, that depends....

• If you work from your home office and provide treats to your dog so she won’t bite the FedEx® man, you’d have a challenge proving this was a necessary business expense.
  
  
• But if you own a chain of drive through espresso stands and hand out dog treats to entice repeat business (knowing how dogs influence their owners’ buying habits), your dog biscuits are obviously a necessary business promotional cost.
  
  
• If you own a kennel, dog treats are an ordinary business expense, just like dog food.

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