Deductible expenses are costs that can be subtracted from an individual’s or business's taxable income, reducing the overall amount of tax owed. These expenses must be ordinary and necessary for the business operations, and in the context of single-member LLCs and disregarded entities, they play a crucial role in determining the net income that is reported on tax returns. Properly identifying and categorizing these expenses is essential for accurate tax reporting and maximizing tax benefits.
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