Non-Deductible Expense

Non-Deductible Expense refers to an expenditure that cannot be deducted from taxable income when calculating a business’s taxable income for tax purposes.

These expenses do not reduce the tax liability of a business or individual because the Internal Revenue Service (IRS) categorizes them as personal in nature or not directly related to the production of income. Examples of non-deductible expenses include fines and penalties, certain political contributions, and personal expenses incurred by business owners. Understanding which expenses are non-deductible is important for accurate tax reporting and compliance.