You Don’t Get to Define ‘Ordinary & Necessary.’
The IRS does.
And if you get audited?
So does the court.
Let’s unpack this 👇
Section 162(a) of the tax code allows you to deduct:
➡️ Ordinary expenses.
➡️ Necessary expenses.
…as long as they’re tied to your business.
But here’s where too many business owners (and social media tax “experts”) miss the mark:
You don’t get to decide what’s ordinary.
You don’t get to decide what’s necessary.
And you absolutely don’t get to decide what’s reasonable.
That’s defined by:
⚖️ The IRS.
⚖️ The Tax Court.
📚 Decades of precedent.
Let me simplify it:
✅ Ordinary = Common in your industry.
✅ Necessary = Helpful for generating revenue.
✅ Reasonable = Defensible under audit.
Here’s a real-world example:
You run a bakery.
Buying an oven?
✅ Ordinary.
✅ Necessary.
But what if you already own 12 ovens…
…and you buy a 13th —
with nowhere to install it?
🚫 That’s not reasonable.
And that deduction like...