ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

A Study On the Expense Deductions of Individual Income Tax in the U.S.

  • Sung-Man Park School of Business and Accounting, The University of Suwon

Asian Tax Journal Vol. 1 No. 2 (2000), pp. 25-54

Abstract

U.S. tax system has been systematically and reasonably built as technologies and industries have developed. Especially basic concepts in tax laws have been so well arranged by the courts for tax laws themselves to be almost converted into textbook. Internal Revenue Service has considered expense concept important as well as income concept. The features of expense are as follows. 1. Expenses should be associated with trade or business or production of income. 2. Expenses should be ordinary and necessary in matching with income. 3. Expenses should be reasonable and be paid or occur during tax period. U.S. Court judges what satisfy these conditions according to the nature of economic activity, motives of profit, and the continuance or regularity of expense. However our tax law about expense is minor and temporary rather than systematic.

Keywords

  • Tax system
  • Income Tax

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