What is a common feature of Ordinary Expenses?

Ordinary expenses are typically characterized by being industry-accepted costs that businesses incur during the regular course of their operations. These expenses are usual, common, and accepted within a particular business sector, meaning that they are predictable and necessary for running the business effectively. Examples of ordinary expenses include rent, utilities, salaries, and office supplies, which are considered standard and necessary for most companies, particularly within certain industries.

Understanding that ordinary expenses are common and expected in the industry helps differentiate them from extraordinary or capital expenses, which may not be as frequent and are not generally accepted as a regular part of business operations. This recognition is vital to correctly categorizing expenses for tax purposes, ensuring businesses can accurately report their financials and maximize their deductibility.